The pandemic, along with other events of the last year, advanced consumer interest in corporate social responsibility (CSR) and raised expectations about how companies contribute to society. A full 59% of consumers worldwide know their insurers’ CSR stance at least somewhat well, with consumers under the age of 45 more aware of social commitments. An average of 56% took at least some CSR-related action involving insurance or other financial products. Reputation is the most critical factor, with a quarter of respondents saying that they have chosen one insurance brand over another due to its CSR reputation.
Consumers in emerging markets are more actively engaged around CSR than their counterparts in advanced economies: 73% say they are aware of the social responsibility stance of companies they do business with, versus 48% in developed markets.
These numbers are consistent with our 2020 consumer survey findings, where we found the most financially impacted consumers are both highly concerned about social justice causes and place a greater value on an insurer’s social efforts in their purchasing decisions.
Other EY research supports these conclusions. The latest edition of the EY Future Consumer Index suggests 43% of global consumers want to buy more from organizations that benefit society, even if their products or services cost more. Nearly two-thirds, or 64%, are prepared to behave differently if it benefits society.
More and more, consumers are choosing brands that share their values, especially regarding urgent societal issues, including climate change, diversity and inclusion, and income inequality. By articulating a purpose beyond profits and amplifying their CSR efforts, insurers can gain traction with a socially active, energized audience. That their products can directly improve financial well-being and facilitate the transition to a greener economy demonstrates how insurers are uniquely positioned to show leadership and differentiate on CSR.
What’s next for insurers: implications and takeaways
The powerful effects of the pandemic will be felt for a long time, at both the level of the global economy and within individual human lives. The lockdowns and social isolation; the fear of contracting the virus and of losing a loved one; the disruption of jobs, careers and everyday activities; the yearning for a return to normalcy and greater financial security — these are the universal truths of the COVID-19 era. Insurers can respond and help people recover in meaningful ways.
1. Communicate with empathy to build trust: our research, along with other studies, provide a detailed understanding of the new challenges that consumers face, their interests in specific products and how they intend to prepare for future shocks. The first thing insurance companies need to do is show that they understand all the impacts — from financial to physical and mental health.
Next, carriers should connect to their customers on a human level, with warmth and empathy, acknowledging the trauma of the last year. Language matters, especially in the digital channels younger consumers prefer. A human touch is the prerequisite to building trust and becoming a partner in strengthening financial well-being.
2. Innovate around customer value: the huge demand for new protections and financial well-being solutions cannot be ignored after a decade of sluggish industry growth. It must be seized vigorously and creatively, with new solutions and distribution options closely aligned to consumer needs and preferences. The key is to provide relevant guidance and scalable solutions now that will help consumers navigate the pandemic’s lingering financial impact and restore their financial well-being.
3. Strategically engage younger consumers: personalized communications and new solutions are not only for mass affluent and high-net worth consumers. The pandemic opened a door to connect with younger and underserved consumers, a segment that insurers have long struggled to engage. It’s a moment of truth to introduce these individuals to the value of insurance as a means to prepare for future financial shocks and as the basis for long-term financial security. By providing relevant solutions now, insurers can lay the foundation for lifelong relationships.
4. Demonstrate purpose and commitment: many carriers showed their purpose in the immediate aftermath of the pandemic, offering premium discounts and holidays and supporting local communities. Going forward, all operations — starting with products, communications and customer interactions —must be infused with such purposeful commitment and humanity. By linking their products to their core values and purpose, insurers can demonstrate they are good corporate citizens sincerely invested in delivering the protections that individuals, communities and society need now.
To learn more about what our survey findings mean for your company’s product innovation and distribution strategies, please contact your local EY team.
Methodology
Between May and August 2021, EY Global Insurance and EY QUEST surveyed 4,200 consumers in both developed (US, Canada, Japan, the Netherlands) and emerging (Brazil, South Africa, the Philippines) markets. The approximately 600 consumers in each country reflected the most recent estimates for age and gender distribution.
The objective was to gather insights about how the COVID-19 pandemic has impacted consumers in terms of their:
- Financial security and well-being
- Concerns and interest in new insurance products
- Purchasing preferences and behaviors
- Awareness of corporate social responsibility
The 2021 research follows on a similar survey, conducted in mid-2020, of insurance consumers in the US, Canada, Italy, France and the UK. The findings from the previous research are available here.