Gomez research suggests that significant interest exists among annuity customers to manage their annuities online, though overall awareness of such services is minimal. While much of today's online financial protection product activity has centered on term life policyholders and prospects, our research suggests that greater interest, and thus opportunity, is related to online access and servicing of annuity products.
The following analysis is derived from a panel representative of the adult U.S. Internet population, which was then reduced to 1350 respondents who currently own life insurance.
A Bifurcated Opportunity
When asked about the online access capabilities of their provider's Web site, a tale of two carrier types emerges. Roughly 25% and 29% of fixed and variable annuity holders, respectively, stated they have visited their provider or agent/broker's Web site; only 15% of term life policyholders claim to have done so. Interestingly, 61% and 58% of fixed and variable annuity owners, respectively, did not know or were unsure whether their provider allowed them to use the Internet to access information on annuities or policies.
These figures further suggest that carriers may find greater return in allocating additional resources towards boosting awareness of online capabilities among the annuity community. The first wave of adopters, those open to the service, can be brought on board by increasing the marketing volume of current online annuity capabilities.
Information Access Critical
When survey respondents were asked which factors were most likely to influence the likelihood of using the Internet for their insurance needs, annuity owners were interested first and foremost in more timely access to account information and balances. Of the respondents who own variable annuities and had visited their provider's Web sites, roughly 47% had attempted to check the balance or value of their annuity.
Provided with ten options, both fixed and variable annuity holders chose more timely access to account information and balances as the most likely factor to influence them to use the Internet to access policy information or customer services. Indeed, Gomez has said for some time that providing more timely access upon enrollment is of paramount importance to insurance carriers that want to increase their online business effectiveness.
Meanwhile, knowing all annuity documents could be accessed online ranked as the second and third factors most likely to influence fixed and variable annuity holders' likelihood of using the Internet to manage these investments.
It should be noted that online document access, one of the three factors cited as most likely to influence use of the online channel by both fixed and variable annuity holders, has also been identified by Gomez as having strong potential to generate cost savings for providers.
As the data above suggests, minimal awareness of online capabilities is hindering online adoption, impacting potential cost savings related to electronic document transmission and servicing administration. Additionally, creating customer convenience and satisfaction could likely be a business driver for additional annuity and investment product purchases.
Should providers desire to create cost savings and consumer satisfaction from their online initiatives, they need to do a better job of generating awareness and boosting adoption sufficient to create the economies of scale necessary to achieve this goal.
Tim Carpenter is an analyst at Gomez, Inc., an Internet benchmarking and improvement strategies firm in Waltham, MA. He can be reached at [email protected].