Web Targets

Web Targets

As insurance products become more commoditized, carriers need to improve their focus on their Internet presence to attract the affluent baby boomer market.

One day, members of Generations X and Y may become the prime targets for life insurers and other financial services companies, but for now, the money still is with the baby boomer generation. To best serve boomers, insurers are seeking better ways to serve their customers, and a recent study by Celent contends a Web strategy is imperative. In his report “Emerging Affluent Baby Boomers, Financial Services & the Web,” Celent senior analyst Craig Weber states insurers need to understand how technology is playing a part in the targeting of these clients.

One problem insurers face in the marketplace is their products are being viewed as commodities. “The tendency by many consumers is to look at pricing as the driver of the decision,” notes Weber. “Most insurers aren't comfortable being a commodity because insurance is more than a bottom-line price. There are elements of financial quality and of service that really should play into the decision.”

Weber points out insurers are becoming resigned to some commoditization in certain products–term insurance and some property/casualty products. As consumers use the Internet to research more complex [insurance] products, the difficulty arises in explaining the products and positioning the services carriers provide into an online environment.

There are two types of boomer consumers, Weber believes, and each needs to be addressed differently. On the one hand, there are people who say they know very little about insurance. “For those, you need to explain products, explain features, make it easy to shop for products, and perhaps provide needs-analysis tools that are appropriate for an end consumer,” he indicates. “The Web experience assumes you don't have an agent acting as an interface. The customer needs to be made more comfortable with insurance products that are complex.”

The second customer is someone who knows more about insurance and likely owns multiple products. “For those, you want to facilitate their regular interactions with you,” says Weber. “If they need a service form, if they need to make a fund transfer, or if they want to dump additional money into an annuity, you want to be able to facilitate those transactions online.”

The transition in recent years from informational to transactional Web sites has required a lot of effort by insurers. “In some cases, you may find yourself building functionality today that won't get heavy use, but it may be part of the price of admission for serving certain markets,” suggests Weber. “It's hard to invest in Web channels if you don't believe people are going to use them, but certain types of consumers clearly are demanding this kind of support today, based in part on their experience with banks and securities firms.”

Security remains a major focus for consumers. Weber asserts certain types of transactions are considered low risk–such as requesting a form–and people don't mind doing those online. Activities such as performing a fund transfer involve a higher risk, both for the insurer and for the insured.

Carriers also need to take notice of the heavy dependence on family and friends as a source of investment advice for boomers. “That is a scary thing if you are an insurer,” Weber says. “It places a high premium on giving your existing customers great service because you know they are going to tell their friends [about their experience], and those recommendations are critical in developing your business.”

The study confirms carrier staff–as well as securities and bank staffs–are at the bottom of the list for people affluent baby boomers turn to for advice, according to Weber. “It places a premium on carriers getting their products available through neutral third parties–independent agents, financial planners, and brokers,” claims Weber. “There always will be a market for captive sales, but a lot of consumers today are looking for neutral advice.”