The Global Consumer Study (GCS), which is the largest global study on life insurance, includes South Africa in its list of surveyed countries. The name of this year’s global consumer study is ‘ReConnect Life”, which, as ReMark says, “is not just a nod to the life insurance industry, but ultimately to how we are, in a special way, closer than ever through this collective challenge.”
The need for life insurance
One of the important findings of the ReMark study is that people’s views on life cover have been influenced considerably because of the events of the past 18 months. According to the GCS, 40.2% of people have changed their attitude to risk and the value of insurance. Of these individuals, 71.8% had had a friend or family member pass away from Covid-19 and 58.1% had tested positive or were closeto someone who had tested positive for the virus.
The study also identified that 67.9% of those surveyed had increased theirlife or health insurance cover, and 35.5% had bought life insurance, as a result of Covid-19. In South Africa, 37.9% of respondents who said that their attitude towards risks and the value of insurance had changed as a result of Covid-19, actually increased their life insurance. As the pandemic highlights the fragility oflife, the importance of having sufficient cover to care for your loved ones becomes far more stark.
Why and how do people buy insurance
The ReMark research also identified the most effective marketing channels for the insurance industry globally. Of the survey respondents who said that they had bought insurance, 31.4% did so because friends and family recommended it and 28.7% did so after a consultation with an insurance agent. Therefore, 60.1% of these respondents purchased life cover because of their interactions with people, rather than through advertising efforts – only 15.5% were influenced by seeing an online advert, 13% as the result of a TV advert and 7.5% because of an advert in the newspaper.
Respondents also sought out advice from the experts, rather than relying solely on their own research. Of those who did buy cover, 75.7% had obtained professional advice during the process, 60% of whom went to an insurance agent or adviser, or an independent adviser. To put the coverin place, 62.9% used an adviser, compared to only 4.2% via an internet comparison website.
The way individuals interact with advisers has changed since the pandemic began, however. Covid-19 has accelerated what was already a solid trajectory towards digital and now people are engaging with advisers and insurers via social media, websites, and email. Consultations are more frequently being done virtually, as people opt for its convenience and safety. ReMark’s GCS found that 83.1% of South African respondents were more likely to prefer using digital services where possible, as compared to 49.9% who said the same last year.
The move toward a hybrid insurance experience from the ReMark research, then, it is clear that people still trust people when it comes to buying insurance. Although a few individuals may opt for ads or internet comparisons, recommendations from people they know and from professionals still come out tops. The pandemic has made us appreciate connection even more, especially in showing empathy, and the personal touch is still key.
Financialadvisers remain very valuable in our space, and that’s a trend Iforesee well into the future. With the accelerated move towards online, combining a human adviser with a digital platform that can be used effectivelyto show people how to protect their risksis undoubtedly a winning formula.
This article was originally published in FIA Insight – Quarter 4 – 2021 on 1 December 2021 and is attributed to Sean Hanlon, BrightRock Executive Director: Sales and Distribution. Click here to read the original online version.