Advisors are the first people Canadian consumers consult when they want information on insurance products, a LIMRA study called Information Seeking in Canada, Consumer Internet Use for Retail Insurance concludes. Yet the Internet is gaining ground each year.
Of the 1,237 Canadians LIMRA surveyed in February 2015, 44% said that they themselves considered an insurance product or annuity because they felt the time was right. Others were influenced by a third party, most often an advisor (30% of cases) or an acquaintance, relative, friend or colleague (29%). Generation X and Y are more inclined to follow suggestions from a friend, relative or employer.
In addition, three-quarters of consumers who seek information on insurance products turned to an advisor. The LIMRA survey also finds that 40% of Canadian consumers view financial advisors as the best source of information, a proportion unchanged since 2012. Advisors are particularly sought after for life insurance purchases.
The proportion of participants who consider the Internet as the optimal information source dipped slightly, from 27% in 2012 to 25% in 2015. Consequently, LIMRA recommends that insurance companies improve their online tools.
Internet gaining ground
Advisors may be the preferred source of information for insurance customers, but the Internet is gaining ground, the study finds. In the past 24 months, two-thirds of insurance information seekers used the Internet. 82% of consumers surveyed consider the Internet a good source of information, and 75% describe the Internet as a good source of insurance advice.
“More than 1 in 2 Gen X and Y information seekers use both financial professionals and online sources for information. The older the consumer, the more likely he or she is to talk with a financial professional but not look online,” Mary M. Art, Director of Distribution and Technology Research.
LIMRA recommends that insurers raise consumers’ awareness of their products. They should explain why these products are good for them. “Direct consumers to your company’s website to learn more about your products,” Art continues.
The research institute invites insurance companies to support their advisors and refine their Internet approach. “It is likely that usage of online sources will continue to increase as more Gen Xers and Yers begin to perceive the need for these products,” she predicts.
Insurance and advisors could also reach younger generations effectively through their parents, the LIMRA study suggests. Banks like TD Canada Trust have gotten the message. “TD Canada Trust also found that parents are influential and satisfactory information sources — and not just for life insurance — but for all financial products, especially, of course, for younger consumers. TD Canada Trust found that two in five Gen Y Canadians consider parents their most trusted financial advisor,” Art says.