A third of millennials say their faith in insurance has increased since Covid, and across all ages 77% of people in the UK who currently have car, home or contents insurance say their faith in insurance to deliver when needed has not changed since Covid. This was slightly higher for women than men at 83%.
Over half (59%) of people agree that insurance in the UK is still fit for purpose, and this is most strongly felt amongst millennials (52% agreed). Only 7% of people disagree with this statement.
Christian Wiens, Founder & CEO of Getsafe, comments: “The results of this survey will surprise many as they appear to contradict the current consensus from the industry that its reputation has been severely sullied over the past 12 months, due to the fallout from Business Interruption claims during Covid, issues around dual pricing, and the impact of a hard market.”
Those who say their faith in insurance has increased over the last 12-month period (32%), say this is a result of ‘covid’, and claims being dealt with quickly and efficiently whilst receiving good communication from their insurance provider. On the other hand, only 9% said their faith in insurance had decreased in the same period.
Iona Bain, author of the Young Money Blog that helps young people get to grips with personal finance, comments: “In a lot of ways, the pandemic has opened up people’s exposure to insurance and it hasn’t been all bad. They perhaps now appreciate that insurance is a product that you have to buy in a smart and informed way. There have been a lot of people benefit massively from being able to claim on their policies over the last year and when these policies ‘come good’ they really improve our perception of insurance overall.
“I think a change is underway. Young people would appreciate a better insurance experience, but young consumers are more conservative than we sometimes think. Once digital insurers become better established, we will see more younger people move across to them. These companies have really encouraged traditional insurers to up their game. Digital insurance is not a silver bullet, but a lot of it is about identifying the really big need-to-know stuff and providing that in a more digestible compact way, on an engaging app.”
The survey was carried out in August 2021 amongst 2000 representative UK adults. It was conducted by market research firm Opinium on behalf of digital neo-insurer Getsafe.
According to the research, three in five (57%) millennials agree that insurance brings them peace of mind and makes them less fearful or anxious. 57% also agree with the idea that insurance ‘has their back’ if something bad happens.
INSURERS NEVER PAY OUT – IT’S A MYTH
Perhaps surprisingly, the ideas that insurance is ‘unnecessary’, and it ‘never pays out’ have the highest levels of disagreement (26% and 38% respectively).
Kim Stephenson a Chartered Psychologist with a background in financial services, comments: “The majority of people feel less anxious once they’ve bought insurance, according to the research, but with a lack of understanding of the policy wording terms and conditions, insurance has historically been bought on faith, not fact; people don’t buy on logic, they buy on emotion. This has long been a fundamental failing of insurance.
Shayne Halfpenny-Ray, Public Affairs Manager at the Chartered Insurance Institute: “Our Public Trust Index research has shown us the better a person understands what their policy does (and in some cases does not) cover, they feel more confident and secure. Better user interfaces and communications strategies could account for a growth in positive perception. There is an overlap between those who are digitally engaged in financial products like insurance and younger demographics, and usage-based models for insurance whilst still not mainstream, is a growing popular model for them.”
In further findings, 79% of millennials who currently have car, home or contents insurance agree that it might save them money to have multiple policies with the same insurer. Slightly fewer (73%) agree that it would make insurance easier to deal with. Millennials are much more likely to agree with these statements than those who are older.
Iona Bain adds: “For me this indicates that young people want to find shortcuts in the way they manage their finances and are becoming primed to expect them. This could partly be the influence of digital banking: why can’t they have a one stop shop app for insurance with all their policies in one place that’s more of a real time experience, like digital banking?”
For those millennials who already have more than one insurance policy, ease of understanding, not price, is the most important factor in encouraging them to buy multiple policies from the same provider – 74% say this is important. Whilst ease of understanding is the most important factor for millennials, for those aged 35+ affordability is still most important (72% for 18-34’s vs 80% for 35-54’s and 91% for 55+).
Christian Wiens, Founder & CEO of Getsafe, continues: “There is a huge opportunity here for neo-insurers like Getsafe to serve up what millennials clearly have appetite for: easy to understand policies, good communication and convenience. It is reassuring to know that the efforts of insurers are going some way to improving the overall reputation of insurance, but insurers still have a lot to do to make insurance a positive experience. Neo-insurers can be seen as frontrunners here. Technology and innovation are the driving force behind Getsafe and many of the new generation of customers demand a digital experience that reduces complexity and improves communications and customer understanding – without piles of paperwork. This is reflected in the 2,500 new customers we now welcome every month. We are the fastest growing neo-insurer in the home segment in the UK, and seem to be on the right track. Our app and digital insurance experience caters to the needs of a tech-savvy generation.”