Many would ditch life cover if in financial distress
Life insurance is not as high on the agenda of Australians as it should be, with up to 28% willing to sacrifice their life cover in the face of financial hardship, according to new research conducted by Swiss Re.
The research, the COVID-19 Consumer Survey, revealed Australians were more willing to dispense with their life insurance than they were either their home or car insurance, but the good news for life insurers is that those same consumers regard insurance as being more important than eating out or gym membership.
And notwithstanding anti-hawking rules, the survey suggests that there are opportunities for insurers to attract new customers via direct contact.
“Australian insurers could be missing a major opportunity to attract new customers, with figures showing that people who have been contacted via phone, email or text have a higher intention to purchase insurance as a result,” it said. “Only 16% of respondents had been contacted by an insurer recently, but 17% of those intended to buy a policy compared to 4% who had not been contacted.”
The survey revealed that eating out and gym memberships were the market’s most disposable luxuries.
The research compared Australia to other Asian markets, and said Australia’s insurance market was the least active in the context of COVID-19, with only 8% of Australians buying a new policy compared with one in two in China.
It said that only 6% of Australians who hold a policy had made a COVID-19 insurance claim, compared to 23% in China and of those Australians making a claim, travel insurance had been the most common at 43%.
The survey found that, like their Asian neighbours, Australians value the ability to process end-to-end online as the top consideration for selecting an insurer.
“The flexibility to mix and match coverages is also valued highly in the market,” it said. “Access to additional healthcare services, such as virtual GP sessions was the most impactful value-add an insurer could offer in Australia (47%). This was closely followed by immediate financial support (44%).”
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The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
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