UK consumers would switch to buying their life insurance on the internet if providers were able to offer professional online advice, according to a consumer survey conducted for PwC. The findings are published as PwC release a new life insurance report, "Forcing the pace: The fast way to becoming a digital front-runner."
Of the respondents, 30% say that online advice from a professional provider would be an important persuasive factor in moving their business online. Those consumers that already purchase life insurance online highlighted cost effectiveness (66%), ease of access(62%) and ability to compare online(61%) as the top three reasons for doing so.
The poll highlights increased competition for traditional life insurers, with consumers open to purchasing policies from alternative providers such as banks(34%), internet brands such as Amazon and Google(17%), healthcare providers(12%), and retail brands(10%).
Graham Jackson, digital insurance partner, PwC, comments
“Digital life insurance transactions have started. However, advice is what matters and it’s clear that consumers want the comfort and flexibility of being able to communicate with their life insurance providers as well as viewing and comparing offers on and offline.
Insurers need to be aware that consumers are also happy to engage with participants outside the insurance industry, and if today’s incumbents don’t get it right then their consumers won’t hang around. Whether it’s price and product information, experience or brand, an insurer’s offering also needs to translate into the digital world.
The main objective for insurers is to have a business strategy for the digital era, rather than digitising what life and pensions businesses are currently doing. Our poll showed that over a third 35%) of consumers agree that tailoring to customer needs would help their insurer improve customer experience. Digital can prompt access to new markets and deliver the ability to create more personalised health, wealth and retirement solutions.”
Other key findings include:
-35% say they would consider downloading and use an App from their insurance provider, 23% stating convenient access to information as the main appeal.
-Men are more likely to shop around for their life insurance, with 62% saying they have had three or more providers in the last 10 years compared with only 47% of women.
The report highlights low- income policyholders, tech-savvy millennials and Generation X-ers increasingly using the internet and social media to compare and buy products, with direct-to-consumer life policies expected to be a key growth area. According to the report, by 2017, a new breed of customers will dominate–digital natives.
These are customers with increased expectations and empowerment. They’re better informed, more connected and vocal thanks to factors such as the growth of social media, mobile, analytics and cloud.
The report also indicates that in comparison to other sectors– including non-life insurance–life and pensions businesses have been slowest to capitalise on the commercial potential of the digital age.
Jackson adds “Traditional approaches are potentially too slow. The industry needs quicker and more economical ways to meet changing market demands. This will include ‘greenfield’ operations, where start-ups run alongside existing capabilities. Businesses remaining on top will constantly be on the move, with the insight to identify new opportunities and agility to mobilise quickly to capitalise on them.
Young people do not currently see life insurance or pensions as relevant to them or affordable. Likewise for lower income customers. The digital age allows insurers to learn more about and engage with these untapped groups, thus expanding their ‘addressable’ market.”
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