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Life insurers could face competition from non-insurance companies

Life Insurance and Annuities
by Tim DeMars
Life insurers could face competition from non-insurance companies
Life insurers could face competition from non-insurance companies

These days, many life insurance issuers are acutely aware of the ways in which the industry is changing and that consumers are always on the lookout for more affordable coverage. However, they may soon have to contend with not only competition from other companies in their sector, but also other sources consumers might soon rely upon when it comes to buying insurance.

With an increasing cognizance of just how much their various types of insurance cost them every year, many consumers are growing more willing to shop around through unconventional sources for all types of coverage, and that includes life policies, according to a new survey from Accenture. For instance, two out of three insurance customers today would buy from non-insurers overall, including 23 percent who would do so through online companies like Amazon or Google. In addition, 43 percent say they'd buy coverage through banks, 20 percent would do so via home service providers like cable or security companies, 14 percent trust retailers in this way, and 12 percent would even go through car dealers.

In fact, about one in four consumers who have life insurance say they're likely to cancel an existing contract in the coming year, and 35 percent said they'd change to a new provider, the report said. While that's down from 40 percent of people with auto or home insurance who responded similarly, that still represents a potentially large number of clients who might see some kind of turnover throughout 2014.

What do consumers value from insurers?
When it comes to their reasons for wanting to switch their coverage, the vast majority of respondents cited the same two things over and over, the report said. Leading the way with 87 percent was simply the cost of coverage, as policyholders may always be on the lookout for ways to save. However, another 80 percent also said that they would change insurers if they thought they could obtain more personalized service.

These are certainly things that life insurers are going to have to keep in mind as time goes on. More people are once again returning to buying life policies for potentially the first time in years, and being prepared to meet both the budgetary and coverage needs they may now bring to the table will be of the utmost importance in achieving success.

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