EY Online Insurance Barometer: How well do you know your clients?

Consumers’ use of digital has always been changing. COVID-19 has brought them to resort to digital more than they used to.

The COVID-19 pandemic has drastically accelerated the growth of e-commerce and digitalization. According to a COMEOS1 study, the number of people making weekly – or even daily – purchases on the internet  has known the strongest increase in years. 94% of the people surveyed indicate that they are considering buying online in the future, and 80% already do. COMEOS  also looked at the financial  sector specifically and found that 37% of respondents had bought financial services online in 2020.

Still, the Belgian insurance market shows a lower digital maturity. In some of our neighbouring countries, digital is already the new normal when it comes to purchasing and using insurance. In Belgium however, the traditional distribution channel for non-life insurance composed of agents and brokers remains strong.

Our intention with the “EY Online Insurance Barometer – Non-Life” is to give an in-depth view of consumer expectations related to the use and significance of online practices within retail insurance. For this, we chose the most important Non-Life insurance products: car and home.  Our research has generated a very rich dataset and a myriad of insights, which are documented in this report and in a dynamic Power BI dashboard.

1. Consumers show an increased appetite for digital

While, in 2018, 23% of respondents indicated that they would definitely or probably be willing to purchase a car insurance entirely online, the percentage went up to 33% in 2021. The trend  is even more impressive for home insurance as it grew from 20% to 32% over the same period of time.

The lack of personal touchpoints and the difficulty to get contact details remain the two main barriers for people who are reluctant to buy insurance online. Our findings on the willingness to buy insurance products online highlight that the main drivers for buying online is  convenience (in over half of the cases), while price was not seen as that important.

2. Laptops/PCs remain the preferred device, smartphones have outpaced tablets

Consumers are still widely indicating computers as their favorite device to perform insurance-related tasks. When we carried out our survey in 2018, the second preferred device was the tablet. Smartphones have now conquered the second position for underwriting, growing from 11% in 2018 to 19% in 2021.

3. The customer does not expect “one-size-fits-all” approach

When considering the preferred interaction mode/channel and the last one used, we observe that consumers’ expectations vary depending on the step in their journey and on the type of action to perform. Having a clear understanding of the targeted customer segment is key to develop successful value propositions. Only then will insurers be able to provide their clients, who often have hybrid expectations, with a compelling offer. Insurers need to find the most appropriate balance between cost-efficiency and effectiveness.

We observe a large discrepancy between the actual and desired use of insurance companies as information provider. The same applies to comparison and consumer websites, as their effective use remains limited in comparison with what consumers would ideally do.

4. The use of chat/video

Conference has increased due to COVID-19 and consumers are keen to keep using them. 20% of respondents to our survey indicate that they now use chat and video conference to interact with their insurer more than they did before the start of the pandemic. They also declare that they intend to keep doing so in the future. Regarding the chat, 17% of respondents are ready to continue using it on a regular basis in the future (vs 9% for video conference).

5. Age, home ownership status and region influence consumer preferences

Our survey shows that consumers under 35 have different expectations than the rest of the population: e.g. they are significantly more willing to use their smartphone to get a quote or sign a contract. When considering specific dimensions of the home insurance, we observe different expectations from renters who are more inclined to buy online and pay more attention to price than owners. Our rich data set also allows to analyze answers based on the region in which respondents are living: people living in Flanders are less inclined to buy online (the highest score is observed in Brussels), people living in Flanders pay less attention to price than those living in the other regions. Education also plays a role, people with a higher education have a bigger appetite to buy insurance online.