Around 9 million Australian households dropped $50 billion shopping online in 2020/21, directing the bulk of sales to house and garden outlets, variety stores and media services.

Consumer spending is at an all-time high, with an unprecedented amount of fiscal and monetary stimulus sloshing around the economy, but there’s one item that’s not in anyone’s online shopping cart: life insurance. Kind of ironic during a global pandemic.

While technology and shifting consumer attitudes have enabled retailers and other service providers to diversify distribution channels and boost sales, online life insurance sales remain negligible and no amount of investment in technology and advertising is likely to move the dial.

Technology has enabled companies to sell things online that people already want but it hasn’t made it any easier for companies to sell things online that people don’t want, even if they need it.

Life insurance is the Brussel sprouts of the financial services industry, a product with undeniable health benefits that people don’t voluntarily eat.

Basic Instinct

A deeper look at consumer data also reveals that the real and potential benefits of digital marketing have been overstated and not only in relation to financial services.

For sporting goods company Adidas, a failure of their search engine optimisation (SEO) system, which is designed to drive web traffic to the Adidas site where people can transact, did not impact online sales. As a result, Adidas focused greater attention on brand and marketing.

This led to a double digit increase in direct-to-consumer sales across EMEA and the United States in 2021.

Based on behavioural science studies, there are psychological reasons why people don’t act as they should.

In the case of buying life insurance, people are being asked to act against their instincts.

Behavioural science, which studies the effects of psychology on investors and markets to highlight human biases, is attempting to do the same thing.

As a relatively new discipline, behavioural science can learn a lot from life insurance.

Firstly, life insurance is sold rather than bought.