According to J.D. Power, increase digital interaction is driving life insurance satisfaction and engagement with the customer.
Customers buying life insurance policies via insurer websites has doubled during the past five years, now accounting for 13% of all life insurance purchases. This is up from 6% in 2019. Overall, 62% of life insurance customers interact with their insurer via digital channels and satisfaction is 838 out of 1,000.
Furthermore, life insurance is increasingly being used as a financial planning tool. The proportion of life insurance customers getting policies for both financial and final planning reasons increased from 30% in 2022 to 39% in 2023.
In addition, if the life insurance policy is purchased solely through an agent with no digital help, customer satisfaction is 795 out of 1,000. This goes up to 821 when digital interactions are introduced.
“Sales of life insurance enjoyed a brief surge in popularity during the height of the pandemic, while sales of annuities have more recently soared,” said 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. Now, however, with more customers than ever engaging with life insurance and annuity providers more frequently via digital channels, we’re starting to see a real evolution. Customers who interact with the digital offerings of their providers are more engaged, have higher levels of satisfaction and are more likely to incorporate their life insurance and annuity products into their overall financial plans.”
Life insurance firms ranked
In terms of specific life insurance companies, State Farm ranked the highest for satisfaction with 843.
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It was followed by Nationwide (840) and MassMutual (809).
The US Individual Life Insurance Study measures the experiences of customers of the largest individual life insurance companies in the United States. The study measures overall customer satisfaction based on performance in five factors (in alphabetical order): communication; interaction; price; product offerings; and statements. The 2023 study is based on responses from 5,588 individual life insurance customers and was fielded from May through July 2023.