During times of great disruption, the eyes of the world turn to the insurance industry for protection and support. The COVID-19 pandemic has been no exception.
Recent research conducted by global reinsurer Swiss Re set out to establish how the pandemic impacted consumer sentiment towards their finances, overall health and future insurance purchases. It highlighted that the unprecedented circumstances from the virus have prompted an increase in consumer engagement with the insurance industry.
“I think insurers should expect to see more engaged customers as a result of COVID-19, we found almost half (44%) in Australia will look more closely at the coverage details contained in future policies and one quarter will be more vigilant about having a broader range of coverage,” said Russell Higginbotham (pictured), chief executive officer, Reinsurance Asia, Swiss Re.
“It seems COVID-19 is causing people to re-evaluate what’s important to them.”
The research drew on responses from across Australia, with the average age of respondents being 45 and a majority - 52% - being female participants.
According to Swiss Re’s findings, the COVID-19 pandemic has changed consumer attitudes towards insurance and policies. One in five participants admitted to feeling anxious about their financial position due to the pandemic, with 56% more concerned over social disruption than becoming ill.
A further 28% of participants admitted that they were willing to sacrifice their life insurance if pressed for money, but only 14% would sacrifice their home or motor insurance in similar circumstances.
The first expenses that respondents would slash before their insurance policies were those relating to hospitality, with 85% being willing to sacrifice eating out expenses, and gym and fitness, with 56% being willing to cancel a gym membership.
However, only 6% of Australians who have a current insurance policy have made a COVID-19 insurance claim, with travel insurance being the most common source of these claims at 43%. This is unsurprising given that strict global travel restrictions, including state lockdowns, have been put in place in a bid to halt the spread of the virus.
The other 23% of insurance claims were related to health, according to the research findings.
But it’s not all bad news – of the 14% who found the time to review their insurance policies, 27% reported finding additional benefits, including counselling services.
The research also revealed opportunities for insurers when it comes to designing their products for the future market. Value-add features were shown to have appealed to consumers, with 47% expressing a desire for access to healthcare services, such as a virtual GP session. A further 44% revealed they were in need of immediate financial support – outside of a claim payment, for example.
Additionally, 51% of respondents say they will look for a pause in premium payments and 43% will also seek discounts on future insurance policies for a set period of time. Perhaps most tellingly, 59% revealed processing future claims online from beginning to the end is a “top consideration” when they select insurers.
Higginbotham says Swiss Re’s research is providing insights for the insurance industry during a time of great uncertainty and change.
“Our research provides valuable insight at a time when consumers are being tested – physically, mentally and financially,” he said.
“It’s in challenging times like these that we find opportunities and, for our industry, it’s a chance to better connect and engage with our customers as well as reviewing product features and how they are delivered in a post COVID world.”