Table of Contents
Scope and Themes
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- What you need to know
- Data sources
- Consumer study data
- Advertising creative
- Abbreviations and terms
- Terms
- Companies mentioned in this report:
Executive Summary
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- Industry overview
- The consumer
- Consumer trust is a major concern for insurers
- The consumer’s view on new product ideas
- Blacks have a higher opinion of insurers, but have less coverage
- Marketing strategies
- Who are the innovators?
Insights and Opportunities
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- Key points
- Blacks are a receptive and untapped market
- Hispanic market to grow strongly, but requires special handling
- Insurers need to use predictive modeling more to enhance marketing
Inspire Insights
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- Trend: The Big Issue
- What we've seen
- Industry application
- Trend: Life Coaching
- What we've seen
- Industry application
Market Size
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- Key points
- Life insurance premium income is down sharply since 2000
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- Figure 1: Life insurance industry statistics, 2010 versus 2009 and 2000
- Health insurance premiums buck the trend
Competitive Context
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- Key points
- Weak economy, low rates continue to test life insurers
- Regulation: The new Federal Insurance Office
- Possibility that the FIO will challenge existing regulators
- Taxation: Life insurance at risk in congressional debates
Segment Performance
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- Key points
- Millions of people are choosing to do without life insurance
- Life insurance in force down nearly 15% since 2007
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- Figure 2: Life insurance in force, 2005-10
- Individual life purchases down 12% since 2007
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- Figure 3: Life insurance purchases, 2005-10
- Life insurance premium receipts off by nearly one third since 2008
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- Figure 4: Individual life insurance premium receipts, 2005-10
- Insurance industry total income down 9% since 2007 peak
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- Figure 5: Life insurance industry income, 2005-10
Marketing Channels
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- Key points
- Dabbling days are over: Life insurers need to do more online…
- …but they need to do it without alienating brokers
Market Drivers
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- Key points
- As U.S. population ages, so does the typical insurance applicant
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- Figure 6: U.S. population projections by age groups, 2010-50
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- Figure 7: U.S. life expectancy, by sex, 2010-50
- An older population should benefit life insurers
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- Figure 8: Age distribution of U.S. life insurance applicants, in percentage terms, 2006-10
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- Figure 9: Age distribution of U.S. life insurance applicants as per cent of population, 2010
- Hispanics will account for vast majority of new population growth
- “Dependency ratio” to rise sharply
Leading Companies
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- Key points
- Number of life companies drops 28% compared to 2000
- Largest companies by asset size
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- Figure 10: Largest life insurance companies, by total assets, 2010
- Largest companies by total insurance in force
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- Figure 11: Largest life insurance companies, by total insurance in force, 2010
- Largest companies by net premiums
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- Figure 12: Largest life insurance companies, by total net premiums, 2010
- Largest companies by group insurance
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- Figure 13: Largest life insurance companies, by group insurance in force, 2010
- Largest companies by individual insurance
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- Figure 14: Largest life insurance companies, by individual insurance in force, 2010
- Metlife
- Prudential
- Northwestern Mutual
- AEGON/Transamerica
- New York Life
- Lincoln National
- Hartford
- Manulife Financial (John Hancock)
- MassMutual
- AXA Equitable
- AIG
- Principal Financial
- Genworth
Brand Qualities
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- Key points
- Ameriprise, TIAA-CREF, Transamerica get top satisfaction ratings
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- Figure 15: Top rated life insurance companies, by customer satisfaction, 2011
Innovation and Innovators
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- Key points
- Hartford says it can deliver insurance to customers in just five days
- Hartford wins patent for accelerated death benefit for chronically ill
- Prudential term policy waives premiums for unemployed and disabled
- Transamerica option lets holders control monthly benefit payments
- New York Life introduces customizable term product
- John Hancock iPad app lets agents generate mobile insurance illustrations
- AXA Equitable creates online game to educate about life insurance
- Can insurance be sold directly to consumers in retail stores?
Marketing Strategies
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- Key points
- Direct mail volume for life insurers drops in 2011
- Representative direct mail advertising
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- Figure 16: Gerber Life email ad, November 2011
- Figure 17: Metlife email ad, November 2011
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- Figure 18: PruLife direct mail ad, October 2011
- Figure 19: The Hartford Mortgage Life insurance direct mail ad, November 2011
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- Figure 20: The Hartford/AAA direct mail ad, September 2011
- Figure 21: Matrix Direct e mail ad, November 2011
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- Figure 22: United of Omaha direct mail ad, November 2011
- Figure 23: Northwestern Mutual direct mail ad, July 2011
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- Figure 24: Transamerica direct mail ad, November 2011
- Figure 25: Genworth Financial direct mail ad, November 2011
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- Figure 26: New York Life/AARP direct mail ad, November 2011
The Consumer—Life Insurance Ownership
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- Key points
- Fewer people carry life as compared to other types of insurance
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- Figure 27: Types of insurance owned, November 2011
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- Figure 28: Types of insurance owned, by gender, November 2011
- Likelihood of buying insurance rises with age
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- Figure 29: Types of insurance owned, by age, November 2011
- Highest earners are most likely to purchase their own insurance
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- Figure 30: Types of insurance owned, by household income, November 2011
- Blacks, Hispanics less likely to be covered by employer-provided plans
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- Figure 31: Types of insurance owned, by race/Hispanic origin, November 2011
- Urban dwellers less likely to own life insurance
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- Figure 32: Types of insurance owned, by area, November 2011
The Consumer—Attitudes about Insurance
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- Key points
- Most think insurance is necessary, but have doubts about it as an investment
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- Figure 33: Attitudes about life insurance, November 2011
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- Figure 34: Attitudes about life insurance, by gender, November 2011
- Highest earners in particular doubt insurance’s value as an investment
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- Figure 35: Attitudes about life insurance, by household income, November 2011
- Blacks place a higher value on need for insurance
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- Figure 36: Attitudes about life insurance, by race/Hispanic origin, November 2011
The Consumer—Reasons for Buying Life Insurance
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- Key points
- Most compelling reasons to buy life insurance
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- Figure 37: Reasons for buying life insurance, November 2011
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- Figure 38: Reasons for buying life insurance, by gender, November 2011
- Reasons to buy life insurance vary by age
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- Figure 39: Reasons for buying life insurance, by age, November 2011
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- Figure 40: Reasons for buying life insurance, by household income, November 2011
- Non-whites see more value in insurance to help with educational expenses
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- Figure 41: Reasons for buying life insurance, by race/Hispanic origin, November 2011
The Consumer—Buying Intentions
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- Key points
- Bad news: Nearly four in 10 have no plans to purchase life insurance
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- Figure 42: Intention to buy/not buy life insurance, November 2011
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- Figure 43: Intention to buy/not buy life insurance, by gender, November 2011
- However, response varies greatly by age; youngest are most likely to buy
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- Figure 44: Intention to buy/not buy life insurance, by age, November 2011
- Lowest earners are least likely to buy insurance
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- Figure 45: Intention to buy/not buy life insurance, by household income, November 2011
- Blacks much more likely to say they intend to buy insurance
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- Figure 46: Intention to buy/not buy life insurance, by race/Hispanic origin, November 2011
- Cost is a big barrier to buying insurance
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- Figure 47: Statements on life insurance, by gender, November 2011
- Many young people dawdle when it comes to buying insurance
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- Figure 48: Statements on life insurance, by age, November 2011
Is Consumer Mistrust Hurting Business?
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- Key points
- Lack of trust is a deterrent to sales
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- Figure 49: Statements regarding trust and insurance companies, November 2011
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- Figure 50: Statements regarding trust and insurance companies, by gender, November 2011
- Trust in insurers varies with age
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- Figure 51: Statements regarding trust and insurance companies, by age, November 2011
- Lack of trust is particularly deterring non-whites
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- Figure 52: Statements regarding trust and insurance companies, by race/Hispanic origin, November 2011
- Trust in current life insurer vs. others in the industry
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- Figure 53: Trust attributes for all insurance companies, November 2011
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- Figure 54: Trust attributes for current life insurance company, November 2011
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- Figure 55: Trust attributes for life insurance companies, comparison table, November 2011
The Consumer: Desirable Product Features
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- Key points
- Consumers interested in a product with lower premiums for healthy living
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- Figure 56: Most attractive features for life insurance, November 2011
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- Figure 57: Most attractive features for life insurance, by gender, November 2011
- Older people would prefer more coverage as benefit for staying healthy
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- Figure 58: Most attractive features for life insurance, by age, November 2011
- High earners prefer premium rebate for healthy living
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- Figure 59: Most attractive features for life insurance, by household income, November 2011
- Some consumers will pay just as much for policy that pays only for specific causes of death
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- Figure 60: Monthly premium will pay for $100,000 policy that covers death from any cause, November 2011
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- Figure 61: Monthly premium will pay for $100,000 policy that covers death from any cause, after terrorist attack, November 2011
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- Figure 62: Monthly premium will pay for $100,000 policy that covers death from any cause, after fatal flu outbreak, November 2011
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- Figure 63: Monthly premium will pay for $100,000 policy that covers only for terrorist attacks, after terrorist attack has occurred, November 2011
Appendix: Simmons Cohort Analysis
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- The average life insurance coverage is $153,000
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- Figure 64: Value of current life insurance policy, by gender, 2011
- Oldest and youngest consumers have the least coverage
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- Figure 65: Value of current life insurance policy, by gender, 2011
- Insurance coverage rises sharply with household income
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- Figure 66: Value of current life insurance policy, by household income, 2011
- Asians have the most coverage, blacks the least
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- Figure 67: Value of current life insurance policy, by race and Hispanic groups, 2011
Appendix: Trade Associations
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