COSTA MESA, Calif., Oct. 3, 2016 /PRNewswire/ -- Life insurers are focusing their efforts on interaction as a way to satisfy their existing life insurance customers and attract new ones, according to the J.D. Power 2016 U.S. Life Insurance Study,SM released today.
While overall satisfaction makes a modest 1-point improvement to 771 on a 1,000-point scale in 2016, compared with 2015, customer satisfaction with their interactions with their insurer jumps 31 points year over year to 839.
Insurance companies generally are increasingly turning to digital channels to interact with their customers, and life insurance is no exception. The study finds that 27% of life insurance customers are communicating with their insurer via digital channels in 2016, up from 21% in 2015. And it's not just Gen Y1 customers who are leading the digital charge. For example, 33% of Boomers submit their life insurance application online, compared with 25% of Gen Y applicants. In contrast, 60% of Gen Y customers have interacted with their insurer in person to submit an application, while only 43% of Boomers have done the same.
"Life insurers are trying to compete in a stagnant pricing market by focusing on communicating with their customers," said Greg Hoeg, vice president of U.S. insurance operations at J.D. Power. "They're getting more engaged, which is much to the delight of their customers. The challenge for insurers is to understand what, and how often, to communicate. It's not as easy as assuming the younger generations want to be self-sufficient and only use digital channels or that older generations only want to communicate by talking with another person."
Most customers want a combination of personal and digital interactions with their insurer. Only 12% of both Boomers and Gen Y customers had exclusively digital contacts with their insurer in the past 12 months. Interaction satisfaction is highest among Gen Y customers (851) when they contact their insurer via both digital and non-digital channels. Boomers, who are most satisfied with non-digital contacts (816), also are highly satisfied with a combination of digital and personal interactions (804).
Wearables: The New Frontier?
An increasing number of life insurance providers are engaging their customers through the use of wearable devices - fitness trackers that monitor the wearer's activities, such as walking or jogging, heart rate and sleep patterns. The notion is to financially reward customers for healthy behaviors. The study finds that 3% of customers received a wearable device when they signed up for their policy and 5% of customers currently receive a discount from their insurer through the use of a wearable device.
That's just scratching the surface, as 46% of customers, including 68% of Gen Y customers, say they would consider wearing a tracking device if their insurer offered rate incentives. Among those who say they would not want to participate, 66% indicate they are concerned about their privacy.
"Wearables are a great way for insurers to compete in the market," said Hoeg. "Whether it's through offering fitness trackers to new customers or rewarding those who already have one and live a healthy lifestyle, it's an incentive that providers can offer and it encourages people to stay healthy or get healthy."
The study, now in its third year, measures individual life insurance customer satisfaction with their insurer based on performance in four factors (in order of importance): price; policy offerings; annual statement and billing; and interaction.
Insurance Rankings
State Farm ranks highest in life insurance customer satisfaction for a third consecutive year, with a score of 828. Nationwide ranks second with a score of 806 and Northwestern Mutual ranks third with a score of 799.
Overall Customer Satisfaction Index Scores |
J.D. Power.com Power Circle Ratings |
|
(Based on a 1,000-point scale) |
For Consumers |
|
State Farm |
828 |
5 |
Nationwide |
806 |
4 |
Northwestern Mutual |
799 |
4 |
Pacific Life |
790 |
4 |
MassMutual |
780 |
3 |
MetLife |
779 |
3 |
New York Life |
774 |
3 |
Principal Financial |
774 |
3 |
Life Industry Average |
771 |
3 |
Prudential |
770 |
3 |
Genworth Financial |
766 |
3 |
Mutual of Omaha |
766 |
3 |
Guardian Life |
760 |
3 |
AXA Financial |
752 |
3 |
Voya Financial (ING) |
745 |
2 |
Lincoln Financial |
744 |
2 |
Protective Life |
742 |
2 |
John Hancock |
739 |
2 |
AIG |
738 |
2 |
Transamerica (AEGON) |
719 |
2 |
Primerica |
717 |
2 |
Midland National Life |
713 |
2 |
Power Circle Ratings Legend
5 – Among the best
4 – Better than most
3 – About average
2 – The rest
Award-Eligible Insurance Companies Included in the Study |
||
Company |
CEO Name |
City |
AIG |
Peter Hancock |
New York, N.Y. |
AXA Financial |
Christopher Condron |
New York, N.Y. |
Genworth Financial |
Thomas McInerney |
Richmond, Va. |
Guardian Life |
Deanna Mulligan |
New York, N.Y. |
John Hancock |
Andrew G. Arnott |
Boston, Mass. |
Lincoln Financial |
Dennis Glass |
Radnor, Pa. |
MassMutual |
Roger Crandall |
Springfield, Mass. |
MetLife |
Steven Kandarian |
New York, N.Y. |
Midland National Life |
Dave Welch |
Sioux Falls, S.D. |
Mutual of Omaha |
James Blackledge |
Omaha, Neb. |
Nationwide |
Stephen Rasmussen |
Columbus, Ohio |
New York Life |
Theodore Mathas |
New York, N.Y. |
Northwestern Mutual |
John Schlifske |
Milwaukee, Wis. |
Pacific Life |
James Morris |
Newport Beach, Calif. |
Primerica |
Glenn Williams |
Duluth, Ga. |
Principal Financial |
Daniel Houston |
Des Moines, Iowa |
Protective Life |
John Johns |
Birmingham, Ala. |
Prudential |
John Strangfeld Jr. |
Newark, N.J. |
State Farm |
Michael Tipsord |
Bloomington, Ill. |
Transamerica (AEGON) |
Mark W. Mullin |
San Francisco, Calif. |
Voya Financial (ING) |
Rodney Martin Jr. |
New York, N.Y. |
The 2016 U.S. Life Insurance Study is based on responses from 6,455 individual life insurance customers. The study was fielded in June and July 2016.
For more information about the 2016 U.S. Life Insurance Study, visit http://www.jdpower.com/resource/us-individual-life-insurance-study.
See the online press release at http://www.jdpower.com/pr-id/2016183.
Media Relations Contacts
John Tews; Troy, Mich.; 248-680-6218; [email protected]
Geno Effler; Costa Mesa, Calif.; 714-621-6224; [email protected]
About J.D. Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info
1 J.D. Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946 -1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004).
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SOURCE J.D. Power
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