Brand trumps advice for life insurers
The brand recognition of life insurance companies carries more weight that advice they receive, according to the latest research from Investment Trends.
The Investment Trends 2024 Consumer Insurance Needs Report has found that when it comes to selecting an insurance provider, brand strength prevails as a decisive factor, with consumers influenced more by brand recognition than by advice or premiums in their decision-making process.
Commenting on the research findings, Investment Trends head of research, Irene Guiamatsia said that in a market where 800,000 Australians are interested in Total and Permanent Disability (TPD) insurance, and 1.8 million are considering Income Protection insurance, the impact of a trusted brand could not be understated.
The research also restated the fact that most Australians do not recognise life insurance as being as important as other investments.
“Even with 34% of the adult population holding life insurance, it’s often seen as less integral than other financial tools,” Guiamatsia said.
“This underscores the need for the industry to bolster the perceived value of life insurance in one’s financial portfolio.”
According to the research, Zurich leads the pack with respect to Net Promoter Scores.
Guiamatsia said that with Zurich leading on client NPS and NRMA outperforming in life coverage satisfaction outside super there was a significant opportunity for life insurers to amplify their digital presence and user experience.
“Insurers are encouraged to heed these insights and align their digital strategies to meet the evolving preferences of consumers,” she said
The research also revealed that life insurance claims processing takes an average of 7.3 days within super and 5.1 days outside of it, while death benefit claims average around 10 days.
“Policyholders are clear in their desire for more straightforward and prompt claims processing. A seamless and efficient claims experience is vital for client retention and satisfaction,” Guiamatsia said.
Curious results. In 20 + years of advising on risk insurance, brand has never been a topic of discussion. That NRMA is seen as “out performing” in the life coverage space strongly suggests that a large proportion of the respondents were un-advised.
“fact that most Australians do not recognise life insurance as being as important as other investments.” is the only useful comment, and even that we already knew.
No surprise. All financial product providers know that consumers are easily duped by marketing, because most consumers find financial products complex and boring. Professional advisers can play a valuable consumer protection role in this context, helping consumers choose products based on what’s in their best interest, rather than based on marketing.
Unfortunately regulators have sided with product companies rather than consumers. Regulators have consistently persecuted professional advisers, trying to drive them out of existence. Regulators have turned a blind eye to misleading and deceptive advertising by product providers, particularly union super. In the insurance field regulators have even colluded with product companies via the outrageous LIF, to push consumers away from professional advice towards dodgy direct products.