Life-insurance policies with perks make it to America

PEOPLE only contact their insurers when things go wrong and they need to make a claim. This generally means losses for the insurer. It also means stress and hassle for the customer. In order to mitigate both problems, insurers increasingly offer extra services alongside their bog-standard policies.

Aviva, a British insurer, for instance, installs sensors on customers’ water pipes to detect even minuscule leaks, so that these can be repaired before causing greater damage. This spares Aviva the cost of a bigger claim, and the client the misery of a flooded basement. Other benefits are intended mainly to foster customer loyalty. Porto Seguro, a Brazilian insurer, offers access to locksmiths, electricians and taxi services.

Life insurers have so far been slower to catch on. But that is changing. Often ancillary services nudge people to live more healthily. AXA, a French insurer, gives its customers access to check-ups. Union Life, a Chinese one, guarantees policyholders a place in an old people’s home and advises them on activities in retirement. Desjardins, a Canadian insurer, offers advice during treatment and recovery from illness.

On August 15th Haven Life, an American life-insurance agency and a subsidiary of MassMutual, an insurer, announced it would include a set of ancillary benefits for its customers. That makes it a pioneer in its home market.

Haven Life’s new perks fit neatly into the global trend. Its ancillary benefits centre on health and planning for death. A digital service for compiling a will, and online storage for important documents, are included. Policyholders also get discounts on family-health services at some clinics, and access to a genetic health test. Yaron Ben-Zvi, the firm’s boss, says the initiative is squarely meant to increase customer loyalty.

A few rivals dangle the odd optional extra. Ladder, a life-insurance startup, offers some help on financial planning through an online tool. State Farm, a large American insurer, gives clients a discount on in-home sensors that monitor old people’s health. But the MassMutual policies that Haven Life sells are the first in America to offer other services as part of the package.

This is not for lack of demand. A survey by Bain & Company, a consultancy, finds that American consumers have very similar preferences to Australian, British and Chinese ones on the sorts of services they want from life insurers.

But America is not a friendly place for innovative insurers. New policies must be approved by each of its 50 state regulators. Mr Ben-Zvi says that some states’ laws are too inflexible, and do not allow for such ancillary benefits. The result is that Haven Life will not initially offer the perks in five states, including Florida and New York, though the firm hopes to make them available nationwide. Even when an offering suits insurers and their customers, it can still take time to spread.