A third of millennials who currently have car, home or contents insurance say their faith in insurance to deliver when needed has actually increased since COVID. GetSafe, the digital neo-insurer, had Opinium conduct a survey on how 2000 UK adults view insurance. Over half (52%) of millennials agree that insurance in the UK is fit for purpose, with only 9% disagreeing with this statement.
From the total 2000 adults surveyed, those who say their faith in insurance has increased over the last 12-month period (32%), say this is a result of ‘covid’, and also claims being dealt with quickly and efficiently whilst receiving good communication from their insurance provider. On the other hand, the 9% who said their faith in insurance had decreased in the same period, put this down to poor service-related issues with insurance companies failing to honour their commitments due to an increase in claims and a decrease in staff to process them.
Iona Bain, an award-winning personal finance commentator who helps young people get to grips with money, 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. Now that digital insurers are becoming 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.”
According to the research, people still have negative sentiments after purchasing a policy, the biggest one being an uncertainty of the value the insurance offers or what it specifically covers– one in five (22%) feel this way. This is closely followed by a concern that insurers won’t pay out if they need to claim (21%), and the worry of how difficult the process will be if they need to call up and make a claim (18%). However, 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.
Insurance IS necessary
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. As insurers get better at simplifying wordings and documents and improving customer communications and tailoring policies to suit individual customer needs, there is less reliance on faith and more certainty in understanding what they are buying. In turn this has resulted in a more positive experience, which is what matters when informing how they feel about insurance.”
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 and CEO of Getsafe, comments, “The results of the survey are surprising in many ways and this is very positive news. It is reassuring to know that the efforts of insurers are going some way to improving the overall reputation of insurance. 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. Innovation in insurance is still at an early stage; insurers have a lot to do to make insurance a positive experience. Neo-insurers can be seen as frontrunners here.”