Third of consumers not well-informed by insurers

Insurance companies could be doing more to reach out to non-traditional demographics, according to a new study – especially when it comes to informing potential customers of their range of insurance products. A global average of 70% of uninsured people were not aware of the breadth of services offered by insurers – suggesting many people who might benefit from those products do not know about them.

Insurance companies are increasingly faced with internal and external disruptions, largely due to new technologies and business models arising. However, digital disruption is also presenting the insurance industry with major opportunities. From new avenues to reach customers, to offering up fresh ways to collect insights into the personal needs of consumers, digital technologies are helping insurers adapt to a rapidly changing environment.

In spite of the chaos of the coronavirus pandemic, this continues to be the case. The crisis has left individuals, companies, industries, and governments many changes, many of which have altered the nature of daily life in fundamental ways. New opportunities and avenues to connect and build relationships continue emerging via technological innovation and digitalisation. However, according to a new report from Capco, the insurance industry could still be doing more to capitalise on them.

The firm’s survey of 13 major economies found that there is no one-size-fits-all customer any more – and therefore no one-size-fits-all solution in the future of insurance. Using digital innovations, insurers could better personalised and connected services – but they could also get ahead of the competition by better reaching previously untapped demographics.

Surveying 13,798 people in the UK, US, Canada, Brazil, Germany, Austria, Switzerland, Belgium, Hong Kong, China, Singapore, Thailand, and Malaysia, Capco found that 37% of respondents do not feel well-informed about insurance and the products available currently – but that this was even higher in certain key demographics. These people subsequently may not realise how particular products would be relevant to them, costing insurance companies business in the process.

With Generation Z coming of age, insurance services for cars and much more become increasingly relevant to them, however 43% of the demographic are not well-informed on insurance. On top of this, a broader 71% of people who are currently uninsured said they were not well-informed about insurance.

When it comes to reaching the uninsured, Capco found that raising financial literacy could be the key. After answering some basic background questions, such as age, gender and education, respondents were asked whether they currently owned an insurance policy. 18 1,286 respondents answered in the negative, while 71% of these respondents had never had an insurance policy before.

Matthew Hutchins Global Insurance Lead, Capco, commented, “It is certainly a positive that 63% of survey respondents consider themselves to be well informed about the range of insurance products available today. However, our research shows there remains a clear opportunity to drive a further uplift both in regards to the levels of financial education and the transparency of policies. Knowledge is power and leads to heightened confidence, more tailored protection and a greater appetite among consumers to explore additional insurance options.”

The UK was more or less in line with the global average. A majority of 62% of its consumers consider themselves well-informed on insurance – with Europe’s average being 63%. However, women who responded were more likely to say they were not well-informed, suggesting there is a large portion of the population who insurers might better appeal to through education in the future.