Emma Ann Hughes examines a significant post-pandemic shift in consumers’ expectations around insurance
If you type ‘buy insurance’ into Google, you will be bombarded with links to comparison websites and insurers that are all promising you a ‘cheap quote’.
Nowhere in the advertising and marketing text listed in the search engine’s results is talk of value for money, how comprehensive the cover on offer is, or an explanation of the quality of service that will be provided.
The reason for that is Google collects data from millions of individuals’ searches and knows what people are looking for – and what they wanted in recent years when it comes to insurance has been a great premium price that they can boast about.
But the latest CII survey of 1,000 consumers of home, motor and travel insurance shows that what people consider to be most important when purchasing an insurance policy has changed due to the coronavirus pandemic.
The poll shows a clear split in opinion between what consumers who have been heavily affected by coronavirus are looking for from an insurance company and the policies they purchase; and those who have not been financially hard hit by the pandemic.
Those identified by the poll as most negatively affected financially by coronavirus now tend to value clarity around claims processes and being able to choose suppliers during a claim, ahead of being rewarded with cheaper premiums for their loyalty.
In contrast, consumers polled between September 2020 and December 2020 who had not suffered a significant financial impact due to coronavirus still believe renewal premiums and rewards for loyalty are the biggest areas of improvement for insurers.
The survey showed that those most impacted financially by coronavirus, and therefore most likely to have changed what they consider important when purchasing a policy, were:
- People who lack confidence around financial matters: 23% of people who said they felt uncertain about financial matters said they were significantly impacted by Covid-19, compared with 9.87% who were ‘somewhat confident’ and 8.33% of people who said they were ‘confident’ with financial matters.
- Young people were hardest hit, with 19.93% of 18- to 34-year-olds polled having been significantly impacted by Covid-19, compared with 12.24% of 35- to 54-year-olds and 5.22% of those aged 55-plus.
- Ethnic minorities were hard hit, as 18.85% said they had been significantly impacted by Covid-19, compared with 10.6% of people who identified themselves as white, or white/British.
- Women were hit harder than men. A total of 12.55% of women said they have been significantly impacted by Covid-19, compared with 10.6% of men.
As the latest CII public trust index findings show, the way people view insurance is changing, so what factors do insurance professionals need to consider, to continue to support clients and meet their needs as we exit lockdown?
Sedgwick, a provider of technology-enabled risk, benefits and integrated business solutions, notes in its Drive to Thrive in 2021 report that the profession is ready to move from ‘what now?’ to ‘what’s next?’; and a key focus of this is to shift from pushing price to raising service standards.
The report notes that technology is continuing to evolve the claims experience, but the human factor remains at the forefront of what the profession does, due to consumers’ expectations.
As technology evolves, Sedgwick notes that it is changing the claims process, freeing people up to have more capacity for the human connection in a claim, compared with the busy work of a claim.
The report notes that in property and auto claims, Sedgwick see trends toward end-to-end solutions, integration of claims and ancillary services, to help streamline processes.
“Managing all touchpoints from intake to resolution with concierge-level service makes things simpler for insurers and insureds, and leads to better outcomes and customer satisfaction,” the report states.
Mike Arbour, Sedgwick chief executive officer, says: “We are confident that the tough times we endured last year will ultimately usher in positive change and highlight our industry’s resiliency.
“Those who thrive in the aftermath of adversity do so in large part not by simply staying the course, but by adapting and embracing change.”
Matt Connell, director of policy and public affairs at the CII, says: “Insurance should provide a safety net for consumers. For too long the focus of consumers has been on price, but Covid-19 has started to make many consider the strength of the safety net and value of the cover provided.
“Consumers hardest hit financially by Covid-19 want the profession to shift the conversation from price to the comprehensive nature of the coverage and service they can expect if they need to make a claim. It is more important than ever that claims processes are as clear and simple as possible for consumers to understand.”
Clearly, those that look set to thrive post-pandemic will be businesses that grasp the fact that while it has been easy to win customers over in the past by quoting the cheapest price, there is a growing awareness among the public that the few extra pounds in your pocket offered by a cheap premium won’t cheer you up if the claims process falls short and you are not shown care at the point when you need it most.
Emma Ann Hughes is communications director of the CII