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Life insurance literacy in the US is low. The majority of Americans purchasing life insurance are middle-aged and financially comfortable, with key conduits of their purchase being financial planning and wealth management. Younger generations are often quite disinterested in the coverage and are a particularly hard sell for insurance agents.
Life insurer Legal & General America (LGA) is on a quest to turn that tale around. The firm recently announced the appointment of Mark Holweger as president and CEO of its insurance division, with the primary objectives of driving business growth and investing in LGA’s distribution channels.
“We see huge opportunity to grow our US business. We have over a million customers in the US already, but when you look at the scale of the country and the number of people who don’t have life insurance, there’s a huge opportunity to breach that gap,” Holweger told Insurance Business. “We’re planning to achieve that by focusing on our business partners and our distribution model, offering digital tools and new technology to make things simpler for our broker partners and the end customer.”
Part of the problem causing low life insurance uptake in the US is the complicated and time-consuming nature of the sales process. The application forms are long and detailed, and many carriers require prospective policyholders to provide fluids, which again adds to the time and effort needed to get the coverage.
Why do the carriers demand such a stringent process? It’s all because of contestability, Holweger explained. In the US, insurers are not allowed to contest details on a life insurance policy form after a two-year time period. This is why they want to carry out a thorough investigation before offering life insurance to someone. In other countries like the UK, contestability is at the time of claim, which means carriers are more able and willing to offer quick, digital solutions with fewer questions.
“We want to make things easier for our customers,” Holweger commented. “Technology can be used in many different ways, from boosting efficiency in back-office and administrative work to enhancing the way we communicate with our customers. We also want to be clever with the way we use data so that we’re not asking customers questions about things we’ve already got answers to.”
Holweger’s appointment as CEO came shortly after the firm launched a consumer-facing blog on life insurance, family, money, lifestyle and technology topics. This fresh communication strategy is part of an awareness building project so that “people understand what life insurance is all about” and are able to make informed decisions around their purchase, Holweger explained.
