No Respect for Online Customers

Life insurance companies' Web sites provide a poor customer experience, particularly with regard to privacy and safeguarding of personal data online, as well as communications, according to the results of the latest study of the industry Customer Respect Group released yesterday. The good news is that some life insurers rank with the best companies in any industry and show other carriers the way forward online.

The study involved an evaluation of 50 insurers' Web sites by Customer Respect Group analysts, based on approximately 150 criteria developed via user polls and other sources. Those criteria are organized within three major categories -- site usability, communication and trust, according to Terry Golesworthy, president of the Boston-based research and consulting firm. The resulting findings are compiled in what the firm refers to as the Customer Respect Index (CRI). Out of a possible 10, the life insurance industry's overall CRI was 5.1, compared to a cross-industry average of 5.8.

That score places insurers in the bottom rank of industries measured, according to Golesworthy. "There's no industry that we find worse than [life] insurance," he remarks. "For three years running insurance has been sitting at the bottom of the list of industries."

Life insurers rank reasonably well for "simple usability," Golesworthy says, but they fall down when it comes to interactivity, privacy and user interfaces.

The CRI profile of life insurance sites suggests that they are applying a vestigial relationship model that is not suitable for the interaction dynamics of the online channel, according to Golesworthy. "The industry continues to regard Web sites as a lead-generation tool for agents, whereas online customers look for Web sites to help them choose between products and companies," he asserts.

"The dilemma for insurance is that companies have a range of products that are difficult to understand and often interrelated, and so one has to be careful about doing simple quotes," Golesworthy adds. "Insurance companies need to balance between their efforts to educate and allowing the consumer to control the dialogue."

Despite the industry's overall poor performance, several insurance companies scored above the cross-industry average and one, Thrivent Financial for Lutherans, reached the researcher's standard for Excellent Customer Respect.

Thrivent's site is distinguished for certain usability characteristics, such as adaptability for the visually impaired, according to Golesworthy. Even more important is its openness with regard to privacy-related considerations. "They are very clear that they don't track data and reuse it for various purposes," he says.

Thrivent's success corresponds to a commitment to online excellence, exemplified by improvements in usability and enhancements to its privacy policy made over the past year, according to Becky Bestul, Thrivent's director for Web site solutions. "Thrivent has long felt that the online channel is important and we continue to look at ways to improve it," Bestul says.

Thrivent's affinity-group orientation is a major factor in the carrier's online commitment, which includes noninsurance-related services and communications capabilities, Bestul suggests. "We have a whole online community for our market, which is Lutherans," she says. Thrivent's Lutherans Online Web site, she adds, "is an opportunity for members to connect not only with Thrivent but with each other."

Second-ranking company Pacific Life distinguished itself for its security practices -- which the Customer Respect Group ranked higher than Thrivent's -- including the use of 128-bit encryption of its contact form.

"We clearly state what our privacy policy is, and we tell people not to put personally identifiable information or personal financial information into an e-mail," says Chris Janowiak, corporate Internet strategist, Pacific Life. "We make sure that privacy is as heavily guarded as possible -- that is just a reflection of our offline policies."

The carrier's long-standing philosophy has been to be the easiest insurance company to do business online, according to Janowiak. Pacific Life has a Web committee that meets regularly to reassess its performance relative to that philosophy and to set goals, such as being the fastest industry Web site. "We constantly meet to strategize and brainstorm on how we can improve our Web site," Janowiak says.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio