to identify who the “untapped” customer is, what they want, and how
best to approach them.
“Besides identifying new types of
clients and putting marketing efforts
to win them,” notes Clark Troy, senior
analyst with Boston-based Aite Group.
“They also are looking outside their
current geographic market to identify
new growth opportunities.”
Troy points to carriers using third-
party data bureaus to identify clients
who would fall into the “Walmart”
customer set vs. the “Nordstrom” set.
“By doing this, they can appeal to the
different demographics and target
them with appropriate products,”
notes Troy. “Ideally, automated under-
writing streamlines the process fur-
ther.”
Deciding what’s appropriate, notes
Drinkwater, may be an exercise that
benefits both adviser and client. “The
advisers we talk to express a desire for
simpler, more transparent products
that they can understand and explain
to their clients,” he says. “They wel-
come education and training to learn
more about holistic retirement plan-
ning, but not for the expressed pur-
pose of obtaining another designa-
tion. While they don’t want to be sold
to, they were interested in learning
how certain products could address
the issues facing their clients.”
CLARIFYING CONFUSION
Drinkwater backs his claim with results of a recent LIMRA study. The majority of financial advisers surveyed
believe guaranteed income products
are too complicated and confusing,
and seek materials and support from
wholesalers and companies to help
explain the products to their clients.
Jennifer Warren, managing direc-
tor of the Dallas-based Retirement Se-
curity Institute, agrees that education
is needed. “The fixed income annuity
is a commonly misinterpreted asset,”
she says, “and the insurance industry
has done a better job at communicat-
ing the benefits of annuities than in
the past. But the majority of Ameri-
cans are still not fully aware of today’s
annuities—with their greater flexibil-
ity and value to retirees. Given a re-
evaluation of retirement portfolios,
they can be a formidable asset class to
re-dress volatility and hedge down-
side risk.”
Brett Wollam, SVP of marketing at
Boston-based Fidelity Investments,
says his firm understands why there is
confusion. “We know it’s important
to begin by taking our messaging and
product design down to the core ele-
ments of what’s needed to supple-
ment either a retirement saving plan
or retirement income plan,” he says.
Troy agrees that there is a need to
simplify, but asserts that it could be
worse. “There is a greater financial lit-
eracy than there was 20 years ago,” he
says. “And although the Internet as an
educational tool has been helpful,
there is still a lot of confusion over
which product does what.”
Indeed, to educate and engage po-
tential customers, the Internet tends
to be the technology tool of choice
for large and small insurers alike.
With assets under administration
of $3.39 trillion and assets under
management of $1.52 trillion, Fidelity Investments and its subsidiaries
relies heavily on its Web presence to
educate its existing and potential client base, using Facebook, Twitter and
Fidelity Mobile applications.
Part of a larger strategy that includes support from LIMRA, the Insured Retirement Institute, promotions, phone-based reps and fee-based
advisers, Fidelity’s real strength, says
Wollam, is in taking a simple product
approach.
“We use the Internet and interactive
tools, even videos, to provide basic in-
formation—to demystify the products,
so clients can understand what their
purpose is, but also how they fit into a
broader retirement plan.”
CLIENT TOOLS
Fidelity’s VP of Web and Distribution
Steven Hawes, says that while the company’s primary website functions as a
customer education and engagement
tool, the company leverages metrics
that enable them to track page views,
length of visit, or if a portion of a video is watched or is completed.
“The “what are annuities” video
pages get a lot of traffic, confirming
the need for basic information,” says
Hawes. “We found that those videos
are used far more than we would have
expected when we were designing
them.”
Wollam says the website really
serves two purposes—to educate and
to capture new business. “Once the
client shows interest, interactive tools
such as our annuity calculator, retire-
ment income planner or retirement
quick check, provide a more custom-
ized view of whether the product is a
fit or not.”
Fidelity’s more than 300 mutual
funds, coupled with discount broker-
age services, retirement services, es-
tate planning, life insurance, wealth
management, and securities execu-
tion and clearance, stands in stark
contrast to the life and annuity prod-
ucts offered by Alpha Insurance Co.,
Montgomery, Ala., a farm bureau
membership organization that,
through 400 service centers, serves
rural customers in Alabama, Georgia
and Mississippi.
“Our agents and customer service
reps are active in their communities,
Alpha’s director of IT, Jody Carroll,
points out. “They go to the same
church and belong to the same social
groups. But that doesn’t mean we
don’t have an eye on the technology
and tools necessary to effectively
identify new business and educate
our customer base.”
For example, the insurer recently
partnered with the University of Ala-
bama to create an iPhone application
for life and property/casualty cus-
tomers. Like Fidelity, Alpha also mes-
sages using Facebook and Twitter, and
offers various interactive quoting
tools on its website, tracks traffic, and
assigns follow-up.
Having recently implemented automated underwriting, Carroll says
Alpha replaced a process that required
up to two weeks with one that now
typically requires 60 seconds from
the time the customer digitally signs
the application to when the agent
submits it electronically.
“The results have been positive,”
notes Carroll. “Because this technology enables our agents to collect the
customer’s information 100% complete and deliver it to the underwrit-er for review so quickly, our time to
service the customer has improved,
and the need to inconvenience the
customer to collect additional information has been reduced. The intuitive technology prompts the application process, so the agent can focus
on making sure the customer understands which life or annuity they are
purchasing, and how it works and is
comfortable that it meets their
needs.” INN
For more about annuities in the industry, search “Better
Info on Annuities” at www.insurancenetworking.com.
