AI can prep buyers, but life insurers still miss advisor matches

Half of consumers are comfortable using AI to research life policies, but most would prefer agents whose demographics compare to their life experience to evaluate the coverage during the purchasing process, a new study finds.

It's not for lack of wanting an advisor. Two-thirds of consumers said they prefer working with someone when finalizing coverage and 85% want an advisor interaction at some point during the process, according to the World Life Insurance Report 2027 by the Capgemini Research Institute and LIMRA.

But many consumers expect advisors to understand their life experience and circumstances, with half of respondents saying that they prefer to work with an advisor who shares demographic characteristics to them. Fewer than a quarter of insurance companies can actually match advisors to consumers in that way. 

Fifty-one percent of consumers surveyed said they plan to use generative AI tools to find and compare life insurance products.

Some insurance companies address this need directly with identifiable standards including transforming consumer engagement to tailor advice, modernizing advisor experiences and enhancing data foundations. But only 10% of the carriers fit this description, according to the Capgemini report.

"Best-in-class insurers demonstrate what's possible when consumers sit at the heart of every decision. They build the data foundations to turn customer intelligence into proactive, lifelong engagement that has a real commercial impact," said Samantha Chow, global leader for the life insurance, annuities and benefits sector at Capgemini, in a press release. 

Consumers are confused by life insurance, as more than 40% feel uncertain or unconvinced with the information they find; one in four drop out of the purchase process, according to the report. Technical language, affordability concerns and perceived lack of relevance rank as the most common reasons a person doesn't complete the process. 

"The top 10% are orchestrating an ecosystem of advisors, partners and AI-enabled channels to create a consistent journey between automated and human touchpoints," Chow said.

The report includes two research sources conducted with Phronesis Partners. The Global Voice of the Customer Survey, which polled 6,175 consumers from 18 countries between April to June. The Global Insurance Executive Interviews was completed during the same period and includes 198 senior insurance executives from life insurance companies in three regions.