As the insurance industry continues to embrace technology, insurance companies are feeling the pressure to create more consumer-friendly, simpler and convenient solutions.
This is at a time when consumer expectations are increasingly centering around personalization, transparency and speed. As such, it’s never been more important to understand the end user to stay relevant in today’s environment.
Here, we spotlight the modern insurance buyer; defined as internet users who have purchased any of the 7 insurance types we track in the past 3-6 months.
Who is today’s insurance buyer?
Accounting for half of all internet users worldwide, insurance buyers skew young and affluent, and are evenly split between genders. The majority (31%) are within the 25-34 age group, dropping off substantially across older age groups.
From a global perspective, APAC houses the largest prevalence of insurance buyers, where almost 6 in 10 fit this audience profile.
In fact, the top three most prominent countries for insurance buying are found in this region, with Vietnam, China and India leading the way.
The industry in Vietnam expects to see a growth rate of over 18% in the coming year, equivalent to the sum of $8.1 billion. While in China, the health industry is booming, with 1 in 5 internet users recently purchasing health insurance.
APAC’s most distinctive type of insurance is life insurance, with insurance buyers twice as likely as the average to have purchased this in the last 3-6 months. And here, there’s plenty more room for growth – in 2017, written premiums in China valued $64.7 billion, with a projected value of $136 billion in 2022.
Elsewhere, insurance buyers represent around 4 in 10 internet users in every other region, with the lowest representation in MEA (36%).
Of the 7 different insurance types we track, car and health insurance are the most popular globally, purchased by over 1 in 3 insurance buyers.
Car insurance in Europe is more popular than anywhere else, with 6 in 10 car-owning insurance buyers in the region recently purchasing this type of insurance.
In APAC, increasing urbanization has led to a rise in average disposable income.
Here, the number of internet users within the top 25% income bracket has risen from just over 1 in 10 in 2010, to 1 in 5 in 2019, and as such, APAC could prove a viable market for car-insurance in the near future.
What should insurance brands know?
1. Connected devices can lower premiums.
To get closer to the modern insurance buyer, we have to look beyond their demographics.
Firstly, they have a natural appetite for risk. Just under 6 in 10 define themselves as risk-takers, and their most distinctive interests certainly display this – they’re 20% more likely to be interested in gambling and esports, and they’re also very proactive investors compared to the average (over 60% are).
Despite this appetite for risk, insurance companies do have ways to determine these risks more precisely using connected technology, and insurance buyers aren’t averse to this.
Wearable technology, such as smartwatches (18% own one) and smart wristbands (14%) are an important part of their device portfolio. They’re also ahead of average for owning a smart home product too (15% do).
Among smart product owning insurance buyers, almost 60% own a smart speaker, but smart utility products (43%) and smart security products (40%) are also popular.
While these devices are beneficial in lowering premiums, insurance companies should tread carefully with privacy concerns. Two-thirds of this audience are worried about how companies use their personal data and are also concerned about the internet eroding their personal privacy.
As such, transparency in how their data is shared using these devices to lower their premiums is absolutely necessary.
2. Audio channels are key for brand discovery.
When purchasing insurance products, few insurance buyers say they would do so through online means.
The only exception is Europe, where insurance buyers purchase their insurance online slightly more so than anywhere else in the world, presumably thanks to the popularity of product comparison sites in this region (4 in 10 insurance buyers use them when researching products).
Car insurance sees the most online purchasing from 35% of insurance buyers, while life, purchased by just 6%, is the lowest.
Looking at their typical purchase journey, they have a strong affinity for audio, social media, and, to a certain extent, print channels when discovering brands or products – a reflection of their higher engagement with all three media during their day compared to average.
Like with the broader online population, their top discovery sources are search engines (33%), TV ads (30%) and word-of-mouth recommendations (27%).
But they’re most ahead of average for discovering brands via music streaming services, podcasts, and brands’ social media updates. Throughout the age groups, but particularly among older cohorts, stories and ads in magazines and newspapers emerge as their top over-indexes.
In general, we see how receptive they are to ads:
56% of insurance buyers tend to buy brands they see advertised – 20% more likely than the average internet user.
3. They value the opinions of others.
When researching a product, insurance buyers look for a second opinion.
Just under half of all insurance buyers say they’re easily swayed by other people’s opinions, 1.2 times as likely as the average. In addition, over two-thirds say they always like to seek expert opinion before purchasing products and services.
So when it comes to researching, insurance buyers are likely to flock to sites driven by public opinion, evidenced from their higher likelihood to use micro-blogs and online pinboards.
The only exception here is among older members of this audience, with 1 in 3 45-64s looking to price comparison sites as their go-to research stop.
Testament to their desire for transparency and personalization, insurance buyers stand out for wanting brands to provide customer communities/forums (26%) and to offer personalized products (34%).
Companies that achieve this will reap the rewards of keeping their customers both connected and informed.
4. They prefer convenient and simple tech solutions.
As we saw earlier, technology plays an important part in insurance buyers’ lives. But we also know that technology can be a double edged sword – it’s a source of both convenience and frustration.
Insurance companies need to amplify the former. A third of insurance buyers say they just don’t understand new technology, putting them 27% ahead of the average.
Offering simple and fast tech solutions in an industry traditionally associated with cumbersome and slow user interfaces can go a long way, and given they’ve embraced connected devices in their lives this gives companies an important opportunity to do just this.
Not all parts of the insurance industry are ready to offer such tech-driven solutions, however. This is clearly reflected in the self-reported challenges insurance workers now say they face.
Technology can prove cost heavy, with the two sharing a symbiotic relationship; cost dictates the rate of technological adoption, while technology, in itself, gives companies the necessary competitive edge.
Over 1 in 3 insurance workers claim effective use of IT/technology and improving the products and services they offer customers are the most important business initiatives their company now faces.
The future of the insurance industry
As consumer expectations are becoming increasingly diverse, the “one-size-fits-all” model is no longer effective, seen most recently in evolving U.S. healthcare models.
Instead, consumers are opting for personalized policies that suit their unique lifestyles.
As investment floods into the Insurtech space, traditional insurance incumbents are having to react, and getting closer to their customers is one of the most effective ways staying relevant in such a fast-moving sector.