Connect with us

Hi, what are you looking for?

News

Why insurers must adapt to meet the changing Philippine landscape under COVID-19

Second of two parts

Consumer insurance behavior and preferences are evolving due to changes wrought by the pandemic on the psychological, emotional and economic levels. While the long-term impact of COVID-19 remains tough to predict, insurers must seize the opportunity to transform and reimagine their products and services to meet changing consumer behavior and preferences that will enable sustainable growth opportunities in the new normal.

The EY 2021 Global Insurance Consumer Survey reveals relevant insights about the impact of the pandemic as well as its anticipated changes to consumer insurance preferences and buying behavior. To accomplish this, consumers throughout various diverse countries in developed and emerging countries were surveyed between May and August 2021 to gather insights about the consumer insurance landscape. Moreover, the survey also highlighted how insurers can adapt in aligning solutions to cater to changing needs, helping consumers by providing a “safety net” that protects against future financial risk and uncertainty, and enabling digital channels to meet consumer demands while maintaining social distance for safety.

In the first part of this article, we discussed the details of insurance consumer behavior and preferences based on financial impact, as well as consumer concerns and product preferences. The most and least impacted segments both reveal unique needs that compel insurers to adjust their products, solutions, and distribution channels to be flexible and easy to understand.

In this second part, we discuss the increased shift to digital channels, and the increased prioritization of insurers with corporate social responsibility commitments.

THE INCREASED SHIFT TO DIGITAL CHANNELS
With the strict and constantly changing quarantine and lockdown guidelines implemented by the Government and fears of exposure to the virus when stepping outside the home, a majority of consumer activities have shifted online. There has been an increase in consumers who similarly moved online to connect with their agents — from a low 25% before the pandemic to as high as 57% ever since the pandemic started.

One key insight here is that insurance companies have the opportunity to re-examine and adjust their digital distribution and communication offerings to address these shifting consumer preferences. Taking their business to the digital space becomes a much more viable path to move forward even beyond the pandemic. This also provides a compelling opportunity for the insurance sector to devise new ways to re-engage relationships with customers through proactive communication and education regarding their products and services.

However, despite an increase in online interactions, there was still some reluctance when it came to exchanging personal data. As much as 60% of the most impacted respondents stated a willingness to share personalized communication in exchange for help in meeting their savings goals while only 50% of those in the least impacted segment were willing to share similar personalized communication.

These findings point towards an opportunity for insurers to consider investing in training agents to interact effectively with their customers in online spaces. This situation also provides a similar opportunity to ensure the implementation of enhanced cybersecurity protocols, data privacy policies, and the like.

PRIORITIZING INSURERS WITH CSR COMMITMENTS
The survey makes it clear that both the most impacted and least impacted segments highly prefer insurance companies with CSR commitments. Of the overall respondents, 46% stated their awareness of how their insurance providers participate in CSR matters. Meanwhile, as much as 58% of the respondents use company websites to understand an insurance company’s commitment to CSR efforts.

Both segments indicated that a company’s commitment to CSR initiatives, such as labor practices, income inequality and gender income inequality are important metrics that influence their purchase decision.

Over 40% of the respondents from both the most impacted and least impacted groups let a brand’s CSR reputation influence their purchase decision, while an average of 37% from both groups have even chosen one brand over another based on its CSR footprint. The considerable impact of CSR commitments on the purchase decision of consumers must be considered in the insurer’s strategic customer-centric response.

PAVING THE PATH FORWARD FOR INSURERS
The pandemic relates to the very objective of insurance: protecting everyone against uncertainty and unforeseen circumstances. Insurers must capitalize on the heightened awareness of the necessity of insurance caused by pandemic, as this challenging environment provides a great chance for insurers to relate more effectively to customers in managing financial risks and navigating uncertainty. Though consumer needs and preferences are evolving in the context of this pandemic, they are unlikely to revert to pre-pandemic demands.

Insurers can pave the way to provide customer-centric products and solutions that would align with emerging consumer behavior and preferences. One of the ways to accomplish this is by delivering insurance products through channels that reflect the switch to digital. To remain competitive, insurers must also participate in CSR initiatives, continue to educate consumers on the value of their products and ensure that consumers can clearly comprehend their policies.

While the long-term impact of the COVID-19 pandemic remains difficult to predict, insurers who can transform and reimagine their products and services to meet changing consumer behavior and preferences are more likely to find new opportunities for post-pandemic growth.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views reflected in this article are the views of the author and do not necessarily reflect the views of SGV, the global EY organization or its member firms.

Faith Mariel N. Reoyan is a Senior Manager from the Consulting Service line of SGV & Co.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

News

TOKYO – Japan‘s government is considering tapping funds under an account set aside for foreign exchange intervention to pay for an expected increase in defense spending, Kyodo news agency reported on Tuesday. The government could...

News

REUTERS WASHINGTON – The administration of President Joe Biden has drawn Republican fire for its cautious response to nationwide protests in China against COVID-19 lockdowns, with some lawmakers accusing it of...

News

BEIJING – Three Chinese astronauts arrived on Wednesday at China’s space station for the first in-orbit crew rotation in Chinese space history, launching operation of the second inhabited outpost in low-Earth orbit after the NASA-led...

News

STOCK PHOTO Image by Pexels from Pixabay ALMATY – McDonald’s licensee in Kazakhstan was forced to temporarily close its restaurants this month after cutting ties with Russian companies and running out of supplies, three sources with...

News

SINGAPORE – Olivia Chiong and her wife feel like the Singapore government has made clear to them and their two children that they don’t belong in the city-state. So this week’s vote...

Editor’s Pick

The UK’s biggest broadband and mobile operators have today met with the government to follow up on commitments agreed in the summer to support...

You May Also Like

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

News

KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.