Consumers need to secure against future risks
Consumers expect the impact of COVID-19 to last. Almost half expect that normal life will not resume for at least six months, especially those aged 45 and over.
This likely underpins many consumers' increased need to secure against unforseen events. A quarter of consumers have acquired and/or considering an insurance policy as a direct result of COVID-19, notably car and life. Acquisition has been highest in mainland China, Italy and Brazil to date, with the lowest rates in each of Japan, Australia and the US.
Where consumers need to claim, efficient processing of claims remains critical -- especially in the current environment, where delays in pay-outs may have severe implications for consumers' personal financial situation. Consumers also state an increased preference for using digital channels to settle claims (+6 percent web, +3 percent app).
Trust remains strong, yet more is needed
While policy choice will continue to be price driven, 42 percent are looking for a more personalized product and indemnites against future pandemics. The latter being a direct conquequence of many policies not paying out due to excluion clauses.
Trust in insurance companies appears not to have been damaged (+4 percent points net improvement in trust), however, it is clear that consumers are impacted. A third now request proactive communications on the effect of COVID-19 on the service offered and want to understand how exactly their policies have been affected and what they are covered for and what they are not.
Clarity on what is and isn't covered will help insurance businesses further build trust. The benefits will be in both greater societal awareness of the need to secure against unforeseen events, and greater consumer willingness to provide personal information. Two in five consumers are willing to share more data with insurers, if the value is clear to them. However nearly half are looking to be keep their data more private, indicating that firms need to explain the benefits of data sharing, to engender greater trust in the sector.
What does this mean in the new reality?
The insurance sector should expect continuous increased activity around customer acquisition and churn. Organizations who will succeed are those who maintain consumer trust (for example, by processing claims efficiently).
Organizations need to be transparent about what is and isn't covered. This will be critical to support consumers in a time of lasting uncertainity.