Covid-19 changes way consumers purchase insurance

The latest Chartered Insurance Institute survey of 1,000 consumers of home, motor and travel insurance shows a clear split in opinion between what consumers who have been heavily affected by coronavirus are looking for from an insurance company and the policies they purchase and those who have not been financially hard hit by the pandemic.

Those identified by the poll as most negatively affected financially by coronavirus now tend to value clarity around claims processes and being able to choose suppliers during a claim ahead of being rewarded with cheaper premiums for their loyalty.

In contrast, consumers polled between September and December 2020 who had not suffered a significant financial impact due to coronavirus still believe renewal premiums and rewards for loyalty are the biggest areas for improvement for insurers.

The survey showed those most impacted financially by coronavirus were:

• People who lack confidence around financial matters: 23 per cent of people who said they felt uncertain about financial matters said they were significantly impacted by Covid-19, compared with 9.87 per cent who were ‘somewhat confident’ and 8.33 per cent of people who said they were ‘confident’ with financial matters.
• Young people were hardest hit with 19.93 per cent of 18 to 34-year-olds polled significantly impacted by Covid-19, compared with 12.24 per cent of 35 to 54-year-olds and 5.22 per cent of those aged 55 plus.
• Ethnic minorities were hardest hit as 18.85 per cent said they have been significantly impacted by Covid-19, compared with 10.6 per cent of people who identified themselves as white, or white/British.
• Women were hit harder than men. A total of 12.55 per cent of women said they have been significantly impacted by Covid-19, compared with 10.6 per cent of men.

Matt Connell, director of policy and public affairs for the Chartered Insurance Institute, said: “Insurance should provide a safety net for consumers. For too long the focus of consumers has been on price but Covid-19 has started to make many consider the strength of the safety net and value of the cover provided.

“Consumers hardest hit financially by Covid-19 want the profession to shift the conversation from price to the comprehensive nature of the coverage and service they can expect if they need to make a claim. It is more important than ever that claims processes are as clear and simple as possible for consumers to understand.”

To see the full research, please visit: https://www.cii.co.uk/news-insight/insight/articles/cii-trust-index-updated-spring-2021/98242