Pinnacle Life: Taking Insurance Online

At Pinnacle Life, our key point of difference is that we specialise in online life insurance, fully underwritten through our website. None of our competitors has this focus as most still run an adviser model relying on a salesforce to explain and sell their product: our business values ease, value for money, care, and protection for our customers. We enable customers to make decisions for themselves.

In 2021 we launched an online advice tool; it was the first of its kind. A year later, it is still the only online life insurance advice tool available in New Zealand. By providing an alternative to speaking with an adviser, our goal was to help address the high levels of under-insurance in NZ – something we are passionate about improving.

Our new tool now makes advice about life insurance accessible anywhere, anytime. It considers what matters to a person, their family and household circumstances, information about assets and debt, any existing cover, and basic health and lifestyle questions. The process is simple and straightforward and delivers personalised, sophisticated advice that is easy to understand.

While other companies purport to offer online advice, our industry research indicates that we are the only provider to do a full needs analysis. Our competitors gather some information and may provide an online quote but then refer the customer to an adviser.

Part of our online advice innovation was to bundle our products together, enabling customers to take out Life Insurance with Income Protection in one policy online. It was important to us that a bundled product would allow customers to complete underwriting questions only once and require only one policy. This simplifies the process, keeping things as simple as possible. We launched our combination product in late 2020. We are still the only provider with this online solution two years later.

We are also one of the only providers globally to provide online real-time underwriting. Our customers can access this directly from the website, or if they have completed the advice, we will transfer them to our online application process with our recommendations transferred automatically.

We believe these innovations are important because they empower our customers to make their own choices and comprehensively fulfil them. While many of our competitors advertise an instant quote and cover, most require a phone call or contact details to conclude the quote process and further contact to complete the application.

By enabling customers to complete the process for themselves, they can stop and start as they choose, consult with family and friends when needed and access any documents at a time convenient to them. It gives them the confidence and control to make decisions for themselves.

We focus on keeping things easy and uncomplicated so that our customers are confident about making the right choice about their cover. Research from NZ regulators indicates that underinsurance is a significant problem in NZ. We believe confidence is what prevents New Zealanders from having the cover they need.

We regularly undertake customer research to gain customer insight. These insights drive our approach to innovation, product development and marketing.

• People need to trust that their loved ones will not be burdened by financial worries at, through and beyond an emotionally trying time.
  Life Insurance has a degree of complexity compared to other insurances due to the subjective value of life.
• People need to be confident they ‘get it right’ as the consequences of ‘getting it wrong’ are genuinely life-altering.
• There are only two types of life insurance customers; those who are new to the category, 1st timers and those who have been here before, switches.
  People are pleasantly surprised by how understandable, easy and quick the online quote experience is.
• Life insurance customers are more diverse than cliched financially secure, white CIS couples with kids.

Our approach is working. Since introducing the bundled product and the online advice, we have seen some changes:

Improved accessibility by removing the complexity barrier

We have observed changes in the cover people are taking out, indicating that it is easier for them to consider and understand the options. For example, in the six months following the bundling of the product, the same number of people chose Life Insurance and Income Protection cover as the total number who purchased this combination in the four years prior. Similarly, the number of Income Protection policies sold in 2021 was as many as were sold in the whole of 2020.

In addition, compared to the year prior, the:

• Average sum insured for Life Cover increased by 12%
• Average amount of Disability cover increased by 32%
• Number of people who chose to add Disability cover to their policy increased 5-fold
• Average amount of Critical Illness cover increased by 55%

We have also noticed a change in the average age of people taking out policies. This could feasibly reflect that the ease of getting multiple products has encouraged younger people to take out life insurance.

Finally, as well as anecdotal customer feedback, we use Feefo to collect customer ratings and feedback independently. Since we launched the new product flow, our service and product ratings have shown improvement, indicating people are feeling more satisfied with their experience with the new product options than they felt before the release of the bundled product.

Reduce the time it takes for customers to get covered

The time to get covered has been reduced by half, to close to 10 minutes. Before the bundled product, getting both Life Insurance and Income Protection required two applications, each taking around 10 minutes. Now that only one application is required, the average time is around 10 minutes.