Producers traditionally have led the charge in life insurance marketing and sales, with customer knowledge largely residing in the heads of local agents and their managers. Major companies have been working to change that equation, however, spending hundreds of millions of dollars to create centralized customer databases, which they hope to leverage in a way that does not compete with the channels.
With system-wide customer information now coming into the hands of corporate marketing teams, the hunt is on for new revenue opportunities. Orphan accounts are front and center in that quest. Especially within insurers that experience high agent turnover, there are vast pools of customers who no longer are served by the agents who initiated their accounts–in some cases, up to 30% of the total customer base.
In prior years when less information was available, there was a tendency to downplay opportunities with these customers. But current research paints a much brighter picture, both in terms of customer needs and purchase wherewithal.
Many orphan account holders are nearing retirement and focused on asset protection, giving insurers an edge over traditional asset management competitors. And this group has more than twice the assets and income of the average policyholder.
But progress hasn't been as straightforward as many had hoped. The problem is that newly-created central databases, while essential, still aren't completely sufficient for new marketing initiatives to this group. Containing only internal information about accounts, balances and transactions, they fail to provide insight on the total customer wallet, for example, and recent and impending life events.
Progressive marketing teams are breaking out of this trap as they learn to augment customer records with rich external information, for example from credit bureaus, and then perform a series of deeper analyses that set the stage for specific campaigns. Starting with general insights on cross-sell patterns, for example, providers then can blend in orphan account insights on customer needs and relationship profitability potential, facilitating the creation of tailored campaigns for target customer groups.
It's not easy to rekindle stale customer relationships. Yet richer marketing analyses of orphan accounts still can pay off handsomely, in direct mail campaigns, in directing the activities of customer service representatives, and in matching new agents with untended accounts. The end result is much higher cross-sell penetration.
Untapped potential
Across the industry, there are literally millions of "fifty-something" customers who maintain life policies purchased in their earlier days, but who ceased additional purchases with a particular carrier when the issuing agent stopped serving the account. Many people in this category have above-average financial profiles. And they have emerging needs for protected assets in retirement; a good fit for insurers. In other words, they are strong prospects.
Especially for carriers with high levels of agent turnover and commensurate high concentrations of orphan accounts, the advent of database marketing has opened a new world of opportunity. For the first time, players can systematically identify and profile static accounts, setting the stage for targeted outreaches that can be managed centrally–a big improvement over the scattered efforts typically seen in the field.
The logical next step is to identify patterns of sales success with similar types of customers who have active agent relationships. The goal is to recreate winning approaches with matching orphan accountholders.
