Despite the low uptake of consumer facing technology in the life insurance sector, research findings by NobleOak Life Insurance contradict the long-held belief that financial advisers are the main point of contact for life insurance. The study clearly show that most people research their insurance needs and products either online or by speaking to their families or friends.
The results, outlined in a paper titled “Life insurance - The online shift in consumer behaviour”, saw 41% of respondents list the Internet as their primary source of information, 38% followed the advice of family and friends, and only 32% of respondents sought professional advice for any of their financial needs, according to a statement by NobleOak.
NobleOak CEO, Mr Anthony Brown, said the outcome of the research showed that some financial services providers need to rethink how they engage with the people who would benefit the most from their products.
“Both life insurance and investment fund managers appear to have been almost immune from the impacts of consumer facing technology up until now, with 72% of the research respondents saying they had not used technology to buy either of these two financial services products and only 16.5% having purchased life insurance online,” Mr Brown said.
But the technology revolution is now just starting in life insurance and investment management. To compound this, the findings also showed that most people are not willing to pay anything for advice about life insurance. Mr Brown said that while this seemed like bad news, the study found that people’s awareness of the need for life insurance was increasing.
There will come a time when people will actively buy life insurance online to protect their families, rather than seek professional advice or wait for someone to sell it to them. He said that the findings were clear that companies like NobleOak need to provide people with more comprehensive, self directed sources of information and tools to help them calculate their own life insurance requirements, at low or no cost.
“If we are going to address the significant problem of underinsurance in the community we need to start giving people better online information, so they can make more informed decisions when protecting their families with life and income protection insurance,” Mr Brown said.