A recent study from LIMRA shows consumers are not aware their multi-line carriers offer life insurance, and when they do, communication, timing and reputation play largely into decision-making.

The report, “The Insurance Cross-Purchase Survey,” examined the results of a survey of more than 4,000 people to understand their purchase behaviors and why people do or do not buy life insurance from their multi-line company.

Among the consumers surveyed, only 48% of them were aware their auto insurance company offered life insurance as well, while in actuality, 95% of the carriers represented offer such services. The study found that while 63% of respondents have life insurance, only 19% own it with the same company as their automobile insurance.

The study also revealed that almost one out of every three people who buy life insurance from a company other than their auto insurance company, do so because they are not aware their multi-line company offers the product. A solution to this problem may be nearer than expected, as 87% of respondents claimed their multi-line agent had never spoken to them about life insurance.

Digging deeper into this rift in communication, of the people who purchased life insurance from their multi-line company, 41% discussed it when they first met with the agent. But only 21% of those surveyed said that it was their agent bringing up the topic of life insurance. In fact, nearly two thirds of those surveyed whose life insurance is with their multi-line company initiated the conversation about life insurance with their agent.

“It’s clear that consumers are open to the idea of buying life insurance from their multi-line carrier,” says Laura Murach, assistant director, LIMRA Distribution Research.

But there may be more to this conversation, as most consumers also say that a change in their personal situation is what spurred them to start a discussion.

“There is an obvious disconnect. In past surveys, 90% of LIMRA’s multi-line exclusive agent (MLEA) panel said they always let clients know they can help them with their ‘auto, home, and life insurance needs’ during the first conversation or meeting,” added Murach. “Perhaps it’s not that sales agents aren’t bringing up the topic of life insurance; but rather, the conversation is not resonating with potential clients enough to respond — or even to remember the conversation.”

LIMRA opened eyes recently by releasing a study that suggested a multi-trillion dollar sales gap between the life insurance coverage consumers felt they needed and the coverage they currently owned. 

Cross-selling life insurance to property/casualty customers has long been a part of the multi-line strategy. Yet despite companies having the products, capabilities, and access, multi-line household penetration rates remain relatively low. While communication and timing appear to be the biggest factors in encouraging the purchase of life insurance, especially with the company you are already working with, reputation also makes a difference.

Sixty-one percent of respondents who purchased life insurance from their multi-line company (19% of total) did so because they trusted the company’s reputation, and 56% cite trust in their agent as a reason. Regardless of age, people say company reputation is more important to them when purchasing life insurance than it is when purchasing auto insurance.

-- This article first appeared on Insurance Networking News.