The Protection Paradox

thinking about insurance

Insurance marketers are living in the best of times and yet in the worst of times. The need for protection has never been more evident. Americans are being bombarded by more risks from more sources than ever before. The Great Recession, globalization, climate change, terrorism, sudden outbreaks of diseases and other forces beyond their control. Everything they hold dear is under threat, from their livelihoods to their retirement security to their health, homes and possessions. Insurance was created to protect against the very risks we are now living day to day.

Yet ask any insurance agent or insurance marketer and they will tell you insurance still has to be sold, and skillfully sold at that. The average consumer, battered though they may be, is still not clamoring for insurance. How is it that a product that was created to provide peace of mind isn’t even part of the mindset of those who need it the most?

LIMRA reports that 95 million Americans do not own any life insurance and two-thirds of Americans don’t own disability insurance. And although most homeowners readily admit their house is their biggest asset, just two percent say having the right level of insurance protection is their biggest financial priority.

With rising rent and skyrocketing healthcare costs, many Americans are still so financially distressed they can’t cover their current bills, let alone find funds for insurance premiums. But studies show even as income rises, insurance remains a low priority. 44% of Americans who earn between $50,000 and $250,000 have no life insurance. 70% of renters don’t own renters insurance. Even the industry-old standby of life event triggers aren’t working like they used to. 75% of adults with one or two children in their household and with incomes below $50,000 have no life insurance. 900,000 children are born every year to single parents who do not have any life insurance.

In such an environment what is an insurance marketer to do? How can the insurance create more demand for protection products?

To start, marketers need to go beyond figuring out what is stopping the sale. For decades the industry has been studying why people buy or don’t buy insurance. Agents have been lecturing people, shaming them, guilting them and coercing them to buy, but it has largely been to no avail. Insurance ownership levels remain stubbornly low. What is needed are solutions that don’t just study consumer behavior, but change it.

At a time when many insurance marketers are struggling, Bodden Partners is thriving. We are a marketing communications firm that specializes in insurance marketing. Our clients include some of the largest, most innovative markers in the business including Prudential, Transamerica, Mutual of Omaha, The Hartford, Nationwide Insurance and many others. If you are facing a particularly resistant (or apathetic) insurance consumer, contact us for a free, no obligation consultation.