Consultants' Corner

Life Insurance: In Aisle Four, Next to the Sunscreen

Terry Golesworthy
Insurance Experts' Forum, November 5, 2012

With most of the life insurance industry struggling to provide sufficient online self-research tools and content without diminishing the influence exerted on decisions by an agent, MetLife is tossing another monkey wrench into the works. Recently, the company announced “Life Insurance in a Box,” and it literally is a box, placed on the shelves of 200 Walmart stores in North Carolina and Georgia.

Is the consumer ready to load up their carts with life insurance alongside their groceries and Taylor Swift T-shirts? I doubt whether life insurance will become a Walmart bestseller anytime soon, but it is a bold step aimed to further demystify the product and expand market penetration. Life insurance ownership is at record low levels, yet many consumers remain hesitant to invite an agent into their homes while the industry struggles with an image and trust issue. According to Woody Allen, “There are worse things in life than death. Have you ever spent an evening with an insurance salesman?” MetLife is therefore looking to change the perception of the industry and enjoying its role as an innovator, first offering online quote engines, then a completely automated online purchase, and now a box of insurance.

Online or in-store purchase options will never totally replace face-to-face or even phone-to-phone dialogue, nor are they intended to do so. This is not about creating channel conflict but providing a multichannel experience—there is a huge difference. Consumers now expect multichannel options for research, purchase and customer service across all products and this applies just as much to insurance.

“Life Insurance in a Box” is a different type of insurance product: It is a one-year term, fixed-price product—very simple to understand and even easier to buy. The box is colorful and looks “fun,” featuring the popular “Peanuts” characters.

Traditionally, the insurance industry has seen it as its professional responsibility to tell the consumer what to buy and how much of it to buy. But in the words of popular culture, “How’s that working out for you?” Does this initiative attempt to commoditize life insurance, or does it expand the market to those uninsured who have either a limited need or budget?

In considering whether this is a trend or a one-off, we can look outside the U.S. market for guidance. In the United Kingdom, a major channel for a full range of insurance products (including life) is Tesco. Tesco is the third largest supermarket chain in the world, with 15 million loyalty “club card” holders. Tesco’s decision to sell insurance caused a reaction in both the retail and insurance industries: two of Tesco’s retail competitors, Sainsbury’s and ASDA followed the company into the insurance market.”

ASDA’s decision is perhaps most interesting as it is a wholly owned subsidiary of Walmart, which might well have provided the appetite to explore the same in the United States.

Is the life insurance industry ready to add retail channels? Are we likely to see Target, Amazon, or Sears enter the insurance industry?

This blog was posted with the permission of the Customer Respect Group.

Terry Golesworthy, president of The Customer Respect Group, has covered technology issues and innovations in the insurance industry for many years.

Readers are encouraged to respond to Terry using the “Add Your Comments” box below. He also can be reached at terry@customerrespect.com.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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