You've probably heard many presentations that include the bleak LIMRA statistics telling us life insurance ownership is at a 50-year record low. You may also hear over and over again about the shrinking and aging of the agent distribution system, the frailty of product profitability and the regulatory threats to some of the key benefits of buying (or selling) life insurance. These problems are not separate from each other. They are all tied at some level to the widening relevance gap between the consumer and the industry.
Houston, we have a problem.
The insurance industry is confusing and boring our future consumers to tears. Actually, they are not crying about anything; they are just walking the other way. As Greg Behrendt and Liz Tuccillo would say, "They're just not that into us."
Many have suggested that the solution is to simplify the product or make it easier and less painful to buy. And of course these things would help. However there is an area of "white space," an opportunity that nobody yet owns, that could potentially help even more. That opportunity is language.
The language of the insurance industry has not changed dramatically over the last 150-plus years. In fact, many of the same words that were invented when insurance was a new innovation are still used today. Words like policy, agent, premium or death benefit are so familiar to us, yet are becoming more and more irrelevant to today's consumer.
Why is that so?
Language evolves over time. Words take on new connotations and meanings with each passing generation. The words and the manner in which they were used a couple of centuries ago were all about the insurance company. Today's consumer is all about him or herself, and anything that sounds like it is for the benefit of someone else is a turnoff or, at the very least, gobbledygook.
A recent study done by Maddock Douglas revealed that consumers of all generations are having a tough time with the language of insurance, and it is getting worse with each new generation. Gen Y, in particular, is the most challenged.
For example, Gen Y associates the word "policy" with rules and procedures as much as insurance. (And rules and procedures are not part of their independent, entrepreneurial fabric.) "Agent" is just as likely to be associated with the FBI or the entertainment industry as it is insurance. Premium means "high quality." "Protection" is more likely to be associated with birth control than with insurance products.
And the term "death benefit" -- huh?
More than one Gen Yer in the survey asked, "What is the benefit of dying?" And "annuity" -- that one just draws blank stares. (For more, go to http://bit.ly/genYstudy.) Furthering these findings, the emotions associated with insurance are negative. And this may often be attributed to the necessity of thinking about death.
Okay, that takes us off the hook, doesn't it? Let's put ourselves back on it for just a moment. I would assert that the negative emotions are more directly attached to how annoyed and ho-hum the consumer feels thinking about it. In fact, the study showed that frustration, anxiety and boredom were more likely to be felt than relief, confidence and satisfaction in the space of thinking about insurance. Is that the desired outcome?
Of course not. And it isn't just the words we are using; it is also the tone, style and context. A tone that sounds at all condescending or company-centric does not work. Style that requires too much effort to read is unacceptable. And the context must be relevant to their lives, or they will ignore it. So the big question is: what to do about it?
Many will point the finger at the compliance and legal departments inside of insurance companies and say, "They will never allow this change." Others will point at state insurance commissioners and say the same thing.
But plain, modernized language is legal. And it is compliant. What's important to understand is whether or not the spirit of the laws and regulations is met.
Think about disclaimers and disclosures. You know that signature requirement that's a page of small type that says something about what's not guaranteed? You know how many treat it? Like they don't want it to be read. Like they want it to be blown by and just signed on faith. Or in the case of the training PowerPoint, the trainer will stand there in the spotlight and tell the audience, "This is the slide that the compliance department makes me have in here..."
However, it's not that they don't want the essence of the disclosure known. It's because the language is so difficult that it can be annoying and confusing. It can make you sound like you're not even a human.
In fact, in the study referenced earlier, Gen Y consumers were asked about 21 different words they might use to describe insurance agents. "Robotic" was considered accurate in 30% of respondents, while "trustworthy" came up only 14% of the time.
What if these pieces of important information were easy to understand and relayed in a way that was really helpful and relevant, perhaps even front and center? Would the consumer say "forget it?"
I doubt it.
I have listened to some of the best agents in a sales process translate the gobbledygook. They are really good at it. And they always tell the truth. For example, think about that common disclosure that says, "Past performance is no guarantee of future results."
Tangled. Autocratic. CYA.
Those who speak plain English may say, "These are returns from the last year; next year, it could be higher or lower."
Trustworthy. Real. WYSIWYG.
What else can you do to help reinvent the language of insurance?
You have access to language gems. Listen to the words your clients use to describe what you do, what they bought, how it works, etc. Use their words instead of yours.
Ask your carriers about research that may have already been done in markets of interest to you. There may be nuggets of insight that could be helpful. Company executives may not know you are interested in that information.
Share what works in your study groups with the marketing executives at your carriers and with the leadership in your agencies, IMOs and/or producer groups. (And I am interested, too!) Innovative ideas can come from anywhere. When we seek out insights from the ultimate buyer and those close to them, develop ideas based on those insights and bring them to market effectively, we empower ourselves to make change so we can stay relevant for many years into the future. That's innovation. After all, do you really want Mark Zuckerberg to be the one to reinvent insurance?
Maria Umbach, M.B.A., CLU, is managing principal, insurance and financial services, for Maddock Douglas in Norwalk, Conn. She specializes in helping large brands innovate new products, services and business models. Maria has spent 25-plus years as a marketing executive in the life insurance space and is now focused on "what's next" for the industry. She is a frequent speaker and the author of the upcoming book series "Flirting with the Uninterested: Innovation in a Sold Not Bought Category." For more, visit her blog at www.soldnotbought.com, or email her at firstname.lastname@example.org.