In Profile: Scott Kallenbach

Getting Real

by Carolyn Ellis

Ms. Ellis is Features Editor for LIFE&Health Advisor. Connect with her by e-mail:

“Get Real Already” is the theme of LIMRA’s latest research which surveyed consumers on insurance company communications and their effectiveness. Conducted with Maddock Douglas, the study focused on the gap between what companies are saying and what consumers are hearing. Scott Kallenbach, LIMRA’s research director, talks with Life & Health Advisor about study findings and some takeaways for agents and advisors.
L&HA: The objective of this study was to determine if the life insurance industry is perceived as authentic in its communications. How did you conduct the research?
SK: One way was to show participants commonly used insurance terms and asked their meanings. Participants generally understood words like beneficiary, deduction, quote, and coverage. But some industry terms were perplexing. Some consumers defined premium as “the best,” cash value as “value of an item in cash,” and accelerated benefit as “the Cadillac plan.”

L&HA: Who did you survey for this study?
SK: The study was based on a nationwide online survey of 1,500 consumers that included a mix of those in Generations X and Y as well as Boomers. Participants play a role in the financial decision-making of the household. The important takeaway is there are 19 million stuck shoppers, people who don’t take action. The stuck shopper doesn’t have life insurance currently and yet says everyone should have it. Or they have employer-paid insurance, or have shopped in the past year, or plan to shop.

L&HA: The term “authentic” brings to mind honesty, clarity and intention. What does authentic mean here?
SK: The theme of the study is “you know it when you see it.” The life insurance industry wants to create an authentic experience for consumers, and we found there are several key elements. Communications should be:
1: Easy to understand. Use simple everyday language, get away from jargon.
2: Down to earth. Be real, approachable, and human.
3: Memorable. Talk about things differently; be interesting and refreshing.
4: Positive. Warm and comforting; realistic and open to possibilities.
5: Credible. Respondents want to the company and agent to be trustworthy and unbiased.
6: Relevant. Consumers want communications to show the company understands them.

L&HA: Do these elements pertain to images as well as words?
SK: They certainly do. When we asked respondents what do they think of around retirement planning and retirement investments, they said security or nest egg. Images we currently see are people living the good life, looking like they’re on vacation. We need to ask consumers what is their vision of retirement and assure them we can help them get there.
We learned from our participants that the people don’t need to look exactly “like me,” but where they are has to be attainable. When we showed three images: a couple holding hands, help is on the way, and a maze, 45% of those surveyed said life insurance shopping is like going through a maze. Only 10% said it’s a piece of cake.

L&HA: Tell us more about the study group.
SK: In addition to online interviews we had in-person conversations with 32 consumers. We observed their reactions and noted their emotional responses to insurance company language. For example, some imagery included stacks of cash. A number of people chose the cash, saying money will be there for loved ones. But some reacted that life insurance is expensive and I can’t afford it. We asked them to bring in any insurance company materials they had received, like an annuity sales brochure. I was struck by how un-engaged they were with the materials.

L&HA: When we buy a new car or gas grill, we focus on features, but how many actually read the manual and can name the equipment parts or understand all the functions? Should we expect financial products to be any different?
SK: You could compare the owner’s manual to a prospectus. How many people take the time to read either one? We have found that as the level of tedium and confusion increases, the ability to retain any information decreases.
To some degree a financial product is a fair comparison to a car. Most of the time the car is performing well and we don’t need to know how it works. With a financial product we can get into details, but can we clearly give context and benefits of the policy? There are great consequences in buying insurance and retirement products – your financial security depends on them. A car you can trade in.

L&HA: How would you describe participants who understand insurance company terminology and images?
SK: These are people we would expect to have had some exposure to life insurance. LIMRA research has shown that life events, such as getting married and having children, are prime life insurance shopping triggers. Findings pertain to what we call the edge of the funnel. Most people describe themselves as do-it-yourselfers. In fact 84 percent said they do research online, with company websites and marketing materials. Even when they are working with an agent, they may prepare for the meeting by gathering information online. If someone takes the time to explain it in layman’s terms, it’s going to affect the whole process for the better.

L&HA: Tell us a little about MRC, the LIMRA Marketing
& Research Conference.
SK: MRC is designed for insurance industry professionals in market research, PR, corporate communications, and advertising. MRC brings them together to network and share ideas. Our presentation on the study at the May 2014 conference was very well received, in fact better than anything I’ve seen in 20 years. Forty people pre-registered for the session, but we had to bring in chairs and leave the door open because people were listening in the hallway. Eighty people returned evaluation forms.

L&HA: What was the most important feedback
from attendees?
SK: The message needs to get to compliance. We need collaboration between marketing and legal to create the messages people get.

L&HA: What takeaway can our readers bring
to their practices?
SK: Use a reverse benefit statement. When your client decides to purchase an annuity, ask her why it’s a benefit to her, why it’s a good deal. When you listen to her in her authentic voice tell you why, you can point out any misunderstandings she might have. This recitation will reinforce for her the discussions you have had.

LHA: What’s next?
SK: Since our research is designed to help companies reach more consumers, it’s a double win. Companies improve their performance, and they help people protect their families. Are you familiar with television series “Modern Family” on the ABC Network? The central character is Jay Pritchett, a fellow in his early 60s and with a second wife in her early 40s. They have an infant son, she has a teenage son she brought to the marriage, and Pritchett has grown children from his first marriage. The question for our industry is, how do we help Jay? v