According to a report released last week by Nielsen, nearly one in five American households will not have a home phone line by the end of the year. To many, I have a feeling that this is a surprising finding, but it shouldn't be. Landline phones are quickly becoming an unnecessary expense. What can one do on a landline phone that they can't with their cell phone?

As far as insurers are concerned, I think the important lesson here has little to do with the downfall of landline telephones and copper wires, and a lot more to do with distribution channels and marketing communications.
There is always a lot of talk in the industry about reaching the next-generation of insurance customers and how to best reach them. The industry needs to make sure that its not making decisions around tomorrow's customers using yesterday's methods.

It's a simple enough concept, to be sure: don't market to young people, don't survey young people, don't provide customer service to young people via out-dated channels like direct mail or phone banking, etc. Unfortunately, old habits can be tough to be break.

Look at the television advertising, for instance. For years, television shows have lived and died by their Nielsen ratings, but do such ratings still provide advertisers with an accurate measurement of a show's popularity? Until the last few years, Nielsen ratings didn't take into account students watching television on college campuses. The ratings also used to ignore new technologies such as DVRs and new ways to view content such as streaming video. Many would argue that the company still hasn't figured it all out. (I prefer to think that this is why something like "Two and a Half Men" is still on the air, while "Arrested Development" is not.)

As a result, it seems to me, many shows that are popular among young adult viewers tend to be under-valued. Take for instance Family Guy, an animated show on Fox that was actually cancelled due to its low ratings. It wasn't until the show posted extremely impressive DVD sales that Fox execs realized that they had miscalculated the show's worth and decided to put the show back on the air.

Politics provide another example. How accurate is polling data, which traditionally only covers landline telephones, if (according to the Nielsen report) 48 percent of heads of household between 25- and 34-years-old use only cell phones?

Are these issues that directly affect insurers? No, not exactly. Still it is food for thought. I know a lot of carriers are exploring and investing in new channels for distribution, marketing and service. Many times though, I get the impression that those projects don't enjoy maximum support from business partners or that they are considered ways to supplement primary, more tradition channels.

Sooner that many think, those traditional channels could become obsolete. Ask yourself, if someone told you ten years ago that 20 percent of the country wouldn't be using landline phones, would you have believed them?

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