What can you get
nowadays for two and a half trillion pounds? Well, you could write
off the UK government’s debt if you wanted to.

Or you could buy the
combined value of at least 10 of the biggest brands in the world,
which would include Apple and Microsoft.

But if you were feeling
really generous you could provide enough life cover to fill what
Swiss Re has named the UK’s life assurance protection gap. The
peace of mind this would afford the UK population and government
could not easily be measured, but it would certainly be welcomed by
many who lose sleep over unprotected mortgage payments and

But if life assurance is
such a great product, why does the gap exist in the first place?
LIMRA has tried to find out by working with US consumers to find
out about their attitudes and experiences and ultimately to
understand why they don’t buy. Of course, it is just as important
to understand why people do buy.

The most popular trigger
to instigate shopping was a life changing event such as childbirth,
home purchase, marriage or divorce.

Other key prompts to
action are the receipt of a large sum of money or assets, a
suggestion of need from a financial professional and being offered
life cover through the workplace.

So, you can find those
with a reason to buy, which is a good starting point, but what
might help you follow up on this and turn it into a

More than seven in 10
[people] will buy if there is face-to-face contact during the
shopping process. The harsh realities of the economics of providing
a face-to-face service may however make this preference
increasingly difficult for insurers and distributors to fulfil in
the future.


Chris HeathChris Heath photo




Advances in technology
have meant that many people browsing for information regarding life
insurance have over the last few years been likely to use the
internet to undertake at least some of their research.

Unfortunately research
tells us that they may be less likely to turn into buyers however,
as only 36% of those who use the internet without face-to-face
contact will purchase.

This figure increases to
54% if the internet shopper subsequently meets with a sales

The type of information
that is provided to potential buyers is another crucial angle to
look at when trying to understand the underbuying of life
assurance. One vital example is helping people to understand how
much insurance they need.

Another LIMRA US study
found that among households considering purchasing, 56% felt they
hadn’t yet bought because they found it difficult to know how much
they needed.

And surprisingly, only
half of recent purchasers had received a recommendation about the
amount of coverage needed from a sales rep, financial adviser or
insurance company.

In the UK the idea of an
Annual Protection Awareness Day has been recently suggested as a
means of helping to solve this issue. This would involve insurers
sending out an annual benefit statement on the same day every year
so that people would at least be aware of the cover they have.
Linked to some form of easily applied calculator to work out a
rough needs analysis, this could provide vital information to the

The benefits of helping
potential buyers understand their needs certainly shone through in
the results of the study.


  • 73% of life insurance
    shoppers who received current needs analyses bought
  • 58% of life insurance
    shoppers who had received needs analyses in the past
  • Buyers who had received
    a needs analysis while recently shopping for life insurance, on
    average bought almost twice as much cover compared to buyers who
    never had a needs analysis.

We have a number of
recommendations that we hope might help organisations reach those
potential life insurance buyers:

1. Reach out to
consumers when they are most ready to buy


2. Offer a personal
contact option


3.  Offer and/or
provide a needs analysis option


4. Recommend an amount
to buy or a range of options


5.  Ask for


6.  Educate
prospects about the value of life insurance


7. Contact prospects who
didn’t buy at the first meeting


8. Contact clients who
recently bought life Insurance


9.  Reach out to
all generations and all income levels.




Swiss Re produced an
excellent insight into the European life industry in 2010, ‘What do
our consumers really think about life insurance, about our
industry, about our products?’.

They concluded that the
missing link between the industry and consumers was engagement.
Hopefully, these suggestions can help to bridge this perceived

The LIMRA research is
used in three reports – To Shop or Not to Shop for Life

Turning Shoppers Into
Buyers, To Buy or Not to Buy Life Insurance, and Trillion Dollar
Baby Growing Up: The Sales Potential of the US Underinsured Life
Insurance Market.

LIMRA, a subsidiary of
LL Global is an association of life insurance and financial
services companies with about 850 members in more than 73 countries
around the world. It was founded in 1916.