A J.D. Power study shows that as more clients use digital tools for financial planning, customer satisfaction with life insurance and annuity providers is increasing. The study found that clients who use the digital offerings of their providers are more engaged, have higher satisfaction levels, and are more likely to incorporate their products into their overall financial plans. Overall, the study indicates a trend towards increased satisfaction when digital interactions are included, even when products are purchased through agents or advisors.
Higher Satisfaction in Annuities and Life Insurance Tied to Digital Engagement
Providers of annuities and life insurance often grapple with customer apathy, with a recent J.D. Power study revealing a rise in satisfaction as clients engage more with digital tools and incorporate these products into their financial plans.
During the pandemic, sales of life insurance surged briefly, and annuity sales have also seen a recent increase. However, overall customer satisfaction and engagement tend to decline over time. This trend is changing, with digitally engaged customers incorporating their life insurance and annuity products into their overall financial plans, resulting in higher levels of satisfaction.
The study, based on surveys conducted from May through July, measured the satisfaction of 3,579 annuity customers and 5,588 individual life insurance clients of the largest U.S. companies.
Digital Engagement Boosts Customer Satisfaction
The research showed an 11-point increase in customer satisfaction with annuity products, averaging 800 out of 1,000 this year, primarily due to increased digital engagement. Providers’ websites have proven to be the most effective channels for purchasing annuities, resulting in high customer satisfaction during the application and orientation process.
Digital clients, who interact regularly with their providers through various online means, now make up 72% of all annuity customers. These customers scored a higher satisfaction level (819), compared to those with no digital (784) or any interaction (726) with their provider.
Life insurance customers are also increasingly turning to digital channels, with 13% using insurer websites for purchases, up from 6% in 2019. Digitally engaged life insurance customers score 79 points higher in satisfaction (823) than those who do not interact digitally.
Moreover, the proportion of life insurance customers purchasing policies for both financial and final planning reasons has risen to 39% from 30%. Policies bought for both reasons yield significantly higher customer satisfaction.
Even with agent or advisor-assisted purchases, adding digital interaction boosted customer satisfaction. Among life insurance customers, a non-digital interaction with an agent or advisor scored a satisfaction level of 795, which increased to 821 with added digital interaction. Annuity clients displayed a similar trend.