Digital transformation boosts satisfaction with life insurance and annuities

investmentnews.com:

Customer apathy toward life insurance and annuities is a decades-old challenge, but technology is helping the industry change perceptions.

The latest generation of mobile apps and websites is boosting customer satisfaction as technology drives greater use of the products for financial planning and final planning (such as death benefits and burial insurance), according to new data from J.D. Power.

“Sales of life insurance enjoyed a brief surge in popularity during the height of the pandemic, while sales of annuities have more recently soared,” explained Breanne Armstrong, director of insurance intelligence at J.D. Power. “But outside of that, customer satisfaction and engagement have generally declined the longer customers hold onto these products.”

But the latest generation of digital tools are creating an evolution with more customers engaging and being more likely to incorporate life insurance and annuity products into their financial plans.

Even when products are purchased through a financial advisor or agent, customer satisfaction in these products is increased when digital interaction channels are used. For life insurance customers, satisfaction is 795 out of a possible 1,000 for non-digital customers but 821 for those using digital. For annuity customers there is a 25-point increase to 809 for digital customers.

The number of life insurance products purchased via websites has more than doubled to 13% over the past five years and 62% of life insurance customers engage with their provider via digital channels. Satisfaction is 823, 79 points higher than for those customers that do not use digital channels.

Customer satisfaction with the application and orientation process—which is a critical part of the annuity