COVID-19 is accelerating trends within the insurance industry with consumers becoming not only risk-averse about their lives - but also their health - with concerns over protection and the level of demand for insurance varying, depending on age and location, according to ReMark's 7th annual Global Consumer Study (GCS) study into life and health insurance.
In May this year, when many countries had moved into lockdown, ReMark surveyed consumers in 18 countries to see whether they had changed their attitudes to insurance and risk, as they faced the threat of the pandemic.
The results showed that young people and countries classed as growth markets were among the categories which expressed the strongest views, saying their attitudes had changed towards risk, and the value they place on insurance.
- 51.3% of Gen Z’s (born after 1996, ages 18-23) attitudes have changed compared with 22.3% Boomers (born 1946-64, ages 56-74)
- 81.9% of people in India said their attitudes had changed compared with 13.2% of Germans
ReMark CEO, Na Jia believes the results have an important message about the approach and adoption of insurance, she commented: “The global pandemic has seen an acceleration of trends which have been developing over the last few years. For younger generations, the pandemic has been a fast-track introduction to risk giving them a level of risk consciousness which normally takes a lifetime to acquire.
“With mortality tables dominating social media feeds, the so-called ‘digital natives’ are suddenly becoming more risk aware and are reconsidering the value of protection much earlier than their more experienced counterparts. There has also been a re-evaluation of risk in growth markets such as China, India and Mexico where 60% of respondents said they had changed their view on insurance as a direct result of the pandemic.”
Trends in 2020
The changes in the life and health insurance sector, in the ReMark GCS, reflect the trends which other business sectors are facing. As the world has been turned upside down in 2020, people have redefined the concept of what is essential and have therefore re-evaluated their requirements, which includes having the correct level of insurance.
The move of markets into lockdown also restricted traditional sales and forced people online, with the more tech-savvy markets and age groups making a faster and smoother transition to contactless purchasing.
The adoption of contactless sign-up through fast and easy to use apps has made a range of insurance products much more accessible. This was demonstrated by a 74% increase globally in a single year for respondents saying they preferred contactless channels.
This change was to a certain extent down to necessity but shows the direction the markets are taking. It is also important that people who have migrated to contactless channels; want to be more pro-active about their health and are looking to exercise more.
Geographical variations in the change to contactless channels is unsurprisingly linked to tech adoption. The penetration rate of insurance in China 85.7%, India 83.9% and South Korea 82.1%, countries which have high levels of smartphone use, is a lot higher than Ireland, UK and Australia (57.2%, 46.0% and 45.5% respectively) and where there are much lower levels of smartphone usage.
The move to digital services is also linked to a younger clientele which has grown up using apps.
However, these age groups also have heightened expectations when it comes to customer service, so contactless interaction has to be efficient, fast and easy.
ReMark GCS also looked at where consumers get advice from and the sources of information they trust. The most avid users of social media when faced with questions of health, Generation Z and millennials, are more inclined to put their faith in traditional sources of information. They will sign-up and purchase health insurance online but only 5.4% would trust social media to provide them with advice.
“When we commissioned the GCS the terms coronavirus, COVID-19 and pandemic were virtually unknown. As the research was taking place, we were all getting used to the realities of lockdown and social distancing, and the findings highlight the differences in response to the virus depending on how old you are and where you live.
“One fact is clear, products like life insurance have become more desirable with 40.6% of consumers changing their minds about insurance as a result of COVID-19. And, more and more buyers of life and health insurance are buying it online. This may have been as a result of lockdown, stopping face-to face meetings, but this year 42.3% of consumers preferred digital channels, compared to 24.3% in 2019, which is a significant change. It is also interesting that young audiences appear to be much more discerning where they get advice and information from, which is very good news as we go through these difficult times.” said Ms Jia
The GCS study was conducted in 18 countries with 10,720 people surveyed between the 12th and 20th May 2020. The fieldwork was carried out by Dynata with all analysis and results preparation being carried out by ReMark.
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