Are your insurance solutions in tune with new consumer needs?

Insurers that proactively connect with this demographic, communicate the value of insurance and offer protection solutions at a time of need can help this segment recover while forming the foundation for long-term customer relationships.

Why social responsibility and justice matter

The most impacted consumers are both highly concerned about social justice causes and place a greater value on an insurance firm’s social responsibility efforts in their purchasing decisions.

More than half of the most impacted respondents reported that a firm’s commitment to social responsibility (racial injustice, environmentalism, income equality, police brutality and employee relations) to be very important in their decision to purchase insurance. In addition, the most impacted were twice as likely (61%) to donate money, time or supplies to a racial justice organization since March of 2020 than respondents overall (31%).

Corporate activity around social purpose is becoming increasingly important to brand reputation and customer retention — and insurers need to think differently about what they are doing in this space.

Insurers have an opportunity to engage a socially active, energized audience by amplifying their corporate social responsibility efforts, including policies and investments to promote equality, diversity and inclusion. Within executive ranks, environmental, social and corporate governance (ESG) and sustainability-related initiatives and a focus on long-term value creation are important to demonstrating the vital purpose of the industry.

To meet consumers’ evolving concerns and needs, insurers must reimagine their offerings and overall value proposition for both existing and prospective customers. Satisfying this market demand starts with a product innovation strategy built around unique solutions that create differentiation in the market.

However, many executives express concern over the ability to achieve such a strategy. In our December 2020 poll of nearly 100 global C-suite insurance executives conducted during a virtual event, product development was predicted to face the greatest challenge in adapting to change.

Developing leading solutions requires an integrated approach that applies innovation discipline to highly regulated products. It also requires the ability to leverage external ecosystems and collaborate with others outside of the industry. Finally, insurers need an adequate technology architecture and supporting platforms.

But everything relies on first identifying the customer and their unmet needs. EY Insurance can help you understand what our survey findings mean to your company’s product strategy and how you can use these insights to strengthen existing customer relationships and develop new ones.

While COVID-19 vaccinations may help address our physical health concerns, the financial distress the pandemic has caused many consumers will be felt for years to come. As consumers’ concerns and needs change, insurers have a responsibility to live their purpose of providing protection to all.

Developing products around new customer behaviors and priorities, and reaching new demographics in need, will help the industry maintain its relevance and play the role it needs to in the recovery.

To learn more about the survey and what it means for your insurance business, please reach out to the author of this piece, Bernhard Klein Wassink.

Methodology

In late 2020, EY Global Insurance and EY QUEST surveyed over 2,700 consumers and 1,200 small business owners throughout North America and Europe. The objective was to gather insights about how the COVID-19 pandemic has impacted their lives and insurance needs.

To better understand their concerns and preferences, we grouped our population of survey respondents into three segments based on the degree to which they were financially impacted: upper third (most financially impacted), middle third and lowest third (least financially impacted).

Financial impact was measured by a composite scaled score made from seven sub-questions about matters related to financial security, lost wages and reduced employment hours. There is a sizeable difference between the mean amount of impact reported between the most and least impacted groups.