Even with the COVID-19 death toll surpassing 200,000 in the US, consumers don’t seem motivated to buy life insurance – and life insurance customers are largely apathetic toward their insurers, according to new data from J.D. Power.
According to the J.D. Power 2020 US Life Insurance Study, released Tuesday, infrequent client communications and a widespread perception of high cost and transaction complexity have stifled consumer interest and customer satisfaction with life insurance providers.
“The life insurance industry has a significant perception problem, because in the throes of a pandemic, consumers naturally should be more engaged with their insurer – but they aren’t,” said Robert M. Lajdziak, senior consultant of insurance intelligence at J.D. Power. “We’ve been observing a trend for several years that customer satisfaction with life insurance companies starts declining the moment a policy is purchased and continues to decline throughout the relationship due to a lack of policyholder contact from most insurers. The fact that insurers and agents have not been able to reverse this trend during a historic global pandemic speaks to the depth of the challenges the industry faces. Life insurance providers need to dramatically ratchet up their client communications efforts and demonstrate their value to their end customers – not just to advisors and sales representatives.”
Other key findings included:
State Farm ranked the highest for satisfaction among individual life insurance providers, with a score of 838, followed by Globe Life (810) and Nationwide (803). Nationwide and New York Life tied for highest satisfaction among annuity providers with a score of 802.