There's no question about it: insurance consumer behaviour is changing faster than ever before. Specifically, what consumers want, where they want it, and when they want to access their products and services are constantly in flux. In this report, we're going to cover 9 of the most important insurance consumer behaviour trends in 2023 (and beyond). Consumer reactions to COVID-19 are changing the way they view, buy and assess insurance. We surveyed 47,000+ consumers to provide insights to help insurers navigate the remainder of the pandemic and beyond. Three key trends emerged: Giving value for money spent, home as a digital fortress, and a mixed report card on insurers’ response during COVID-19.
1. Consumers Expect Multiple Payment Options
As people increasingly shop online, they also expect a wide selection of different payment options from online retailers. This includes offering different ways to pay (like accepting credit, debit, monthly payments). But also the ability to subscribe to coverage and make payments each month. In fact, the insurance subscription model "Online Monthly Subscription" (OMS) insurance model is growing ever more popular alongside the general growth in eCommerce as a whole. Subscription Business Model TrendAnd there's no shortage of insuretech startups cropping up to meet the demand for OMS at checkout. Stripe is one of the leaders in this category. But there are several others, like Sezzle, making serious inroads.
And there's no shortage of insuretech startups cropping up to meet the demand for OMS at checkout.
Stripe is one of the leaders in this category.
But there are several others, like Sezzle, making serious inroads.
2. Shoppers Want Everything Now
Over the last few years, we've seen a surge in insurance products delivered just in time. Including products that were traditionally only bought in-store or in-person visits by an agent, including Event Insurance (Nicholas Hill Event Liability), Cyber Insurance (Royal Group Services)Rented Condos (Chutter UW). The best example of this trend might be the DTC mattress category. Brands like Nectar Mattress have seen rapid growth largely by delivering a product that was previously seen as too large and bulky to deliver to people's homes. Then the pandemic happened. Searches for "Next Insurance" over the last 5 years. And suddenly, consumers expected everything online. The i delivery space is a great example of the "everything n" trend. But, like essentially all products, consumers now want them delivered instantly while getting the best deal. A handful of insurance companies have pounced on this demand and have seen rapid growth.
Including products that were traditionally only bought in-store, or in person visits by an agent including:
- Event Insurance (Nicholas Hill Event Liability)
- Cyber Insurance (Royal Group Services)
- Rented Condos (Chutter UW)
The best example of this trend might be the DTC mattress category.
Brands like Nectar Mattress have seen rapid growth largely by delivering a product that was previously seen as too large and bulky to deliver to people's homes.
Then the pandemic happened.
Searches for "Next Insurance" over the last 5 years.
And suddenly, consumers expected everything online.
The i delivery space is a great example of the "everything n" trend.
But, like essentially all products, consumers now want them delivered instantly while getting the best deal.
A handful of insurance companies have pounced on this demand and have seen rapid growth.
3. Increased Demand For Ethical Insurance
According to research by IBM, 12 Insurance Companies Among the ‘World’s Most Ethical Companies’ for 2022. Consumers consider sustainability and environmental responsibility to be at least "moderately important" brand values. Consumers support environmentally responsible products.
Consumers support environmentally responsible products.
Harvard Business School reports Tom Ewart had been recently promoted to associate vice-president (VP) of Sustainability at The Co-operators Group Limited (Co-operators), a Canadian financial services company focused on insurance. Ewart and his team were in the process of publishing the company's annual integrated report to inform stakeholders of the firm's current environmental, social, and governance (ESG) initiatives and commitments.
Searches for "esg software" spiked during COVID and is still seeing growth (2225% in 5 years).
In today's competitive landscape, insurance companies are constantly seeking innovative ways to grow and engage more consumers. One such avenue that has gained significant traction is the integration of Environmental, Social, and Governance (ESG) initiatives. But how exactly can ESG help your insurance company grow and reach more consumers? Let's delve into this question.
4. People Take Care Of Their Insurance At Home
The Rise of Digital Insurance: A Consumer Perspective
The digital wave has not just hit the retail or banking sectors; it's making a significant impact in the insurance industry as well. Digital insurance is growing in popularity among consumers for a multitude of reasons. First and foremost, the convenience factor is undeniable. With just a few clicks, consumers can compare policies, get quotes, and even file claims, all from the comfort of their homes. This is particularly appealing to the tech-savvy, younger demographic who prefer online transactions over traditional methods. Secondly, digital insurance platforms often employ advanced analytics in insurance, leveraging artificial intelligence in the insurance industry to offer personalized policies and more accurate pricing. This not only saves money but also increases EBITA by automating insurance processes, making the entire experience more efficient for both the consumer and the provider. Lastly, digital platforms often come with user-friendly interfaces, complete with insurance client management software and CRM insurance software, making policy management a breeze for consumers.
List of Key Features in Digital Insurance Platforms
- Online policy comparison
- AI-driven personalized policies
- Efficient claims processing
- User-friendly interface
By embracing digital insurance, companies can not only cater to consumer preferences but also streamline their operations, thereby saving costs and boosting profitability.
This visual representation encapsulates the key factors contributing to the growing popularity of digital insurance among consumers. It highlights the elements of convenience, personalization, and efficiency, further breaking them down into specific features that digital insurance platforms often offer.
Global Google search growth for "health tech".
5. Influencers Increasingly Influence Buying Decisions
How Are Micro-Influencers Changing the Game in Brand Trust Among Millennials and Gen Z?
The landscape of influencer marketing is undergoing a seismic shift, especially among Millennials and Gen Z audiences. No longer are they solely looking to mega-influencers for brand recommendations. According to data from Influencer Marketing Hub, the industry saw a year-over-year growth, hitting a staggering $13.8 billion valuation in 2021. This proves that influencer marketing remains a vital channel for marketers.
However, the dynamics of consumer engagement with influencers are evolving. A study by HypeAuditor revealed that influencers with a follower count ranging from 1,000 to 5,000 receive double the engagement per post compared to those with larger followings. This has led to a surge in brands partnering with "micro-influencers."
List of Factors Driving the Shift to Micro-Influencers:
- Authenticity: Smaller audiences often mean more genuine interactions.
- Targeted Reach: Micro-influencers often have a highly specialized follower base.
- Cost-Effectiveness: They are often more affordable than mega-influencers, offering a higher ROI.
In the context of insurance for AI and analytics in insurance, this trend could be a game-changer. Imagine an insurance brokerage CRM software company partnering with a micro-influencer specializing in insurtech. The targeted reach could significantly improve customer acquisition costs, thereby increasing EBITA through automation.
So, if you're planning your next marketing strategy, whether it's for insurance CRM or insurance customer management software, don't overlook the power of micro-influencers. They could offer a more authentic and cost-effective way to reach your target audience.
Searches for "micro influencers", who are influencers with <50k followers on a given platform, have increased by 112% over 5 years.
A recent report found that 40% of brands that use influencer marketing have decided to partner with a micro influencer over a traditional influencer.
6. Consumers Subscribe To More Monthly Services
Is the Monthly Subscription Model Ready to Take Over the Insurance Industry?
The business sector of monthly subscriptions has experienced exponential growth, nearly doubling its subscriber base year-over-year. This surge can be attributed to a shift in consumer behavior, as people are increasingly willing to opt for monthly subscriptions for various products and services. From Amazon Prime to streaming platforms, the options for monthly subscriptions are more diverse than ever.
For example, historically, video games have been a one-time investment. You find a game you like, pay for it upfront, and enjoy it indefinitely. While this is still predominantly the case, industry titans like Sony and Microsoft are introducing game subscription services, essentially becoming the "Netflix of gaming."
List of Popular Gaming Subscription Services:
- Sony's PS Now: Offers streaming of hundreds of titles for a monthly fee.
- Microsoft's Xbox Game Pass: Provides access to a library of games for a monthly subscription.
- EA Play: Allows access to EA's library of games for a monthly or yearly fee.
For instance, Sony's PS Now service has amassed over 3.2 million subscribers, showcasing the growing appeal of such models. In the context of insurance, this could be a lesson in how subscription models can revolutionize traditional industries. Imagine a home or business insurance program offered on a subscription basis, potentially saving agents time & money by increasing EBITA through recurring payments using online automation.
Searches for "PS Now" had been rising over the last 5 years before a recent dip.
7. Consumers Spend More On Their Pets
The allure of pet insurance is gaining traction at an unprecedented rate, and it's not hard to see why. As veterinary care becomes increasingly sophisticated, offering treatments that were once reserved for humans, the costs have also skyrocketed. Pet owners are now more aware than ever of the financial risks associated with unexpected illnesses or accidents involving their furry friends. According to industry analytics, the pet insurance market has seen consistent year-over-year growth, much like the analytics in insurance sector. This trend is not just a fad; it's a reflection of a societal shift towards treating pets as family members deserving of quality healthcare.
In the context of automated insurance, the rise of pet insurance could serve as a case study for agencies to increase their bottom line. Imagine leveraging AI to quote, sell, and issue pet insurance policies, thereby increasing EBITA and making the insurance more affordable for pet owners. It's a win-win situation that underscores the transformative power of insurance agency software in adapting to consumer needs.
Search growth for "Pet Insurance" is up 49% in 5 years.
Investing in pet insurance ensures that you're financially prepared for any unexpected health issues your pet may encounter. It provides a safety net that allows you to access a broad spectrum of healthcare options without the burden of exorbitant costs. In the context of analytics in insurance, the rising popularity of pet insurance could serve as an insightful data point. Imagine leveraging artificial intelligence in the insurance industry to streamline claims in pet insurance, thereby increasing EBITA and making comprehensive healthcare more accessible for all pet owners. It's a win-win that highlights the transformative potential of insurance agency software.
While pet owners are often willing to splurge on various products to keep their pets happy and healthy—be it a dog treadmill for Fido's overindulgence in treats or specialized raw food and supplements to balance his diet—there's one investment that offers long-term peace of mind: pet insurance.
Final Thoughts
The trends we've observed in insurance consumer behavior were already gaining momentum before the onset of the COVID-19 pandemic. However, the crisis has accelerated these trends significantly, making them more likely to persist in the long term.
A unifying theme among these trends is the emphasis on convenience. Insurance consumers are more inclined than ever to invest in products and services that offer time-saving benefits, even if it means paying a premium for such advantages.
Additionally, there's a heightened focus on customer experience. As insurance consumers increasingly turn to digital platforms for research and transactions, it's imperative for brands to ensure that their online experience matches the quality of in-person interactions.
Key Trends in Insurance Consumer Behavior
In the context of insurance automation, these trends could offer valuable insights for optimizing insurance agency software and enhancing insurance customer management software, thereby increasing EBITA through automation.
What are the current trends in insurance consumer trends?
Some current trends in insurance consumer behaviour include increased demand for personalized policies, a shift towards digital interactions and online purchasing, a focus on value-added services and benefits, greater emphasis on transparency and trust, and a growing interest in usage-based insurance models.
How can insurers reach Gen Z?
One of the most effective ways to reach Gen Z is through social media platforms. This generation is highly active on social media, and insurers can use this to their advantage by creating engaging and informative content on these platforms. Additionally, insurers can leverage influencer marketing to reach Gen Z consumers. Partnering with influencers who have a strong following among Gen Zers can help insurers get their message out to this audience in a more authentic and relatable way. Insurers can also consider offering personalized and tech-savvy insurance products that cater to the unique needs of this generation. By using a combination of these strategies, insurers can successfully reach and engage with Gen Z consumers.
What role does AI play in client retention?
With advancements in technology, consumers are increasingly gravitating towards digital solutions for their insurance needs. Insurtech companies are leveraging artificial intelligence, blockchain, and data analytics to offer personalized policies and streamlined claims processes. Insurers must adapt and collaborate with these tech-driven startups to cater to the
