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Attention shoppers: life insurance on aisle 18
by Editorial Staff
| January 6, 2009 |
As if worksite marketers don’t have enough worries in an economy that has seen disposable and investment income decimated by a volatile stock market, the competition has been ratcheted up in – of all places – the supermarket checkout, where there’s now a commoditization of products sold in the worksite market. One of the nation’s largest grocery retailers has expanded its financial product offerings to include insurance in the life, home, renters, auto and pet categories, as well as mortgages, home-equity lines and identity theft protection advertised prominently in store displays. Cincinnati-based Kroger, which also offers private-branded credit cards, has teamed up with Garden State to provide life insurance, Charter One to make available home equity loans and KPF Mortgage LLC, which fulfills the retailer’s home loans. The effort has been described as an innovative way to burnish customer loyalty and mine new revenue streams. Other retailers that have experimented with financial services include Tesco, which is based in the U.K., and Loblaw’s in Canada. Kroger Personal Finance was introduced in 2004 with a service-oriented approach designed to set itself apart from banks and a pledge to offer a wide variety of affordable products that “leverages the combined buying power of our customers to provide special offers and group discounts, according to the company’s Web site. The arrangement’s implication for voluntary benefit plans is not necessarily cut and dried. On the one hand, using this channel could “appeal to employees who are suspicious of their employers’ motivations for offering voluntary options, or who have limited or no access to these products,” says Ronald Neyer, a senior analyst on worksite issues for LIMRA International. But he’s quick to add several caveats. To wit: the absence of convenient payroll deductions to help make premiums more affordable, concern about preventing policies from lapsing and uncertainty about how much shopping, so to speak, that the supermarket did when selecting carriers. Brian Ross, general manager of retail analytics firm Precima, recently was quoted in a retail trade magazine as saying “you wouldn’t think that people would want to get their mortgages from a grocery. These companies have been able to do it successfully only because they have built up so much trust and brand credibility with their customers.”
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