Library : EY – How can insurance protect the customers who need it most?

Executive summary :

An EY survey of insurance consumers reveals how the pandemic shifted financial well-being and prompted interest in new insurance protections.

Covid has affected coverage

For consumers, the COVID-19 pandemic has been the equivalent of a massive life event. Its broad-based and multi-dimensional effects were felt psychologically, emotionally and economically. The profound financial impacts forced people around the world to reassess their priorities, goals and needs — indeed their entire lifestyles in some cases.

Widespread health concerns, pervasive economic uncertainties and strict lockdowns bound people around the world into a shared experience of unprecedented scale. But while anxiety and psychological effects were felt universally, it truly has been a tale of two pandemics, financially speaking.

It was worse for emerging markets

Consumers in emerging markets were hit harder than those in mature economies, both in terms of their health and finances. They faced more severe consequences such as job loss, reduction in working schedules and the need to dip into savings. Younger generations were more heavily impacted financially, while older citizens faced a greater mortality risk. Of course, many of these initial effects are still lingering as the virus persists.

Recent EY research confirms how the pandemic fundamentally changed consumer needs, how they plan to increase their financial security, and what insurers can do to seize the opportunity. Conducted between May and August 2021, EY surveyed 4,200 people in seven countries (Brazil, Canada, Japan, the Netherlands, the Philippines, South Africa and the US) about the pandemic’s financial impacts, respondents’ plans going forward, their interest in different types of insurance products, and their buying preferences.

We also spoke to people in cities across the world to get their perspective.

What we discovered…

The results of our research reveal consumers’ interest in new products, with strong value propositions and specific features, and an openness to interact and buy in new ways. Insurers will need to engage consumers with empathy, develop solutions that strengthen financial well-being, innovate their product sets and optimise digital distribution channels. Ultimately, insurers must live their purpose of providing protection to those who need it most, with an eye toward bridging the protection gap.

The four key findings from the EY 2021 Global Insurance Consumer Survey were:

1. The pandemic caused almost universal anxiety, which has prompted consumers to take action and increased their interest in new protections.
2. Beyond the shared psychological impacts, emerging markets and younger generations took the biggest financial hit and show the greatest interest in new products.
3. Emerging market consumers are digitally savvy, open to sharing data and ready to buy new products in new ways.
4. Because corporate social responsibility matters to consumers, insurers need to stand behind great values as well as great products.

See the full report for more…

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