Can Americans’ Increasing Interest in Wellness Help Life Insurers Engage More People?
July 1, 2020 by LIMRA
New LIMRA-BCG study explores consumers’ willingness to share their data and how life insurers can leverage consumers’ enthusiasm in wellness
WINDSOR, Conn., and BOSTON, June 25, 2020—A new study, conducted by LIMRA and Boston Consulting Group (BCG), finds 97% of Americans say they want to improve one aspect of their overall wellness. Three quarters of consumers claim they want to improve their exercise habits and 6 in 10 are interested in developing better sleep and eating habits.
Historically, life insurers’ value proposition has revolved around financial planning and protection—specifically, addressing a family’s concerns about what would happen in the event of a breadwinner’s death. While this continues to be an important factor when buying life insurance, this message is not resonating with a large portion of Americans—according to LIMRA research, 46% of American adults are uninsured. If life insurers can pivot to offer tools and support to help consumers achieve their wellness goals, will more people take steps to purchase coverage?
“The reality is both life insurers and their customers benefit if customers are healthier. If life insurers can provide incentives and support to help their policyholders eat better, exercise more and address mental and physical health challenges, it will undoubtedly improve their policyholders’ longevity,” said Scott Kallenbach, senior director, LIMRA Strategic and Commercial Research. “What’s more, the additional data collected can help life insurers develop new products and services to better serve consumers in the future.”
Consumers recognize life insurers share their wellness goals
The report, Extending the Life Insurance Value Proposition, shows consumers do see alignment between their goals and those of life insurers. Seven in 10 consumers believe life insurers want them to live healthier lives, will safeguard against data breaches and use their personal data appropriately; 6 in 10 consumers believe life insurers will recommend good ideas to improve their health and advise them of treatments if they become ill.
But are consumers willing to share their data?
According to the survey, 87% of consumers say they are willing to share their health data with life insurers if there is some sort of incentive (usually a lower premium). However, consumers say they want to be assured that their health data wouldn’t be used to increase premiums and only used to benefit the consumer.
“We were pleased to see that consumers have a high level of trust in life insurers. According to our research, 4 in 10 consumers have low or no concern about regularly sharing their health-related data with life insurance companies. In comparison, just 2 in 10 consumers feel the same about tech companies,” said Rebecca Waddell, managing director and partner, BCG. “Maintaining consumers’ trust will be critical for life insurers so they will need to ensure robust safeguards are in place to protect their customers’ data.”
The study offers three recommendations for life insurers to adopt wellness offerings:
- Improve engagement for the end-customer: Having an enhanced understanding of their customers’ journey and experiences will provide life insurers with the critical data to enable them to develop wellness-related products and services that will resonate with consumers.
- Mobilize distribution: After creating simple products that consumers can easily understand, it is important that life insurers educate agents and advisors to help them learn about the benefits of the new offerings and who best to target.
- Build wellness capabilities: Whether this is done internally or through a partnership, life insurers interested in developing a wellness program will likely need to invest in new tools and talent to be successful.
To read the full report, please visit: Extending the Life Insurance Value Proposition.
Methodology: In February 2020, LIMRA and BCG had conducted a survey of more than 2,000 consumers. The results are weighted to reflect the U.S. population. LIMRA and Boston Consulting Group also conducted in-person interviews with 32 consumers.
About LIMRA
Serving the industry since 1916, LIMRA helps to advance the financial services industry by empowering nearly 600 financial services companies in 64 countries with knowledge, insights, connections, and solutions. Visit LIMRA at www.limra.com.
About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact.
To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow our clients to thrive. For more information visit www.bcg.com.
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