The protection gap in mature markets could be narrowed if re/insurers focus on building more trust and educating consumers about the benefits of products, according to a report by industry think tank The Geneva Association.
Based on a survey of 7,000 people in France, Germany, Italy, Japan, Switzerland, the U.K. and the U.S., The Geneva Association found that around 60% of respondents believed that insurance offers an important service and plays a vital role in the economy.
However, less than 30% had a positive opinion of the industry, and 53% reported a ‘negative experience with insurance.
More than half of participants also stated that they preferred to purchase insurance in-person from an agent or sales representative, while 46% said they wished they had learned more about insurance at school.
“Contrary to general belief, protection gaps are not limited to emerging countries. They are also common in advanced economies,” said Jad Ariss, Managing Director of The Geneva Association.
“It is encouraging that, according to the survey’s results, people widely understand what insurance is about and its vital role in the economy and society, he continued.
“However, the research also reveals misperceptions of insurers and their products. Addressing this mismatch will be essential to encouraging a wider adoption of insurance in mature economies.”
The Geneva Association recommended that re/insurers focus on simplifying the presentation of their products and improving the customer experience during the claims process.
They should also build an omnichannel proposition for distribution that capitalises on the agency channel rather than trying to bypass it, and better respond to customers’ need for financial education and financial literacy, it suggested.
Kai-Uwe Schanz, Director of the Socio-Economic Resilience research stream at The Geneva Association and author of the report, commented: “The survey highlights the continued relevance of long-standing customer ‘pain points’, first and foremost in claims.
“In this age of digitalization and advanced analytics, the insurance industry has a unique opportunity to address its historical weaknesses and build a more attractive customer experience and proposition.”
