LONDON – 22 May 2024 – Pacific Life Re, a leader in the life and health reinsurance industry, has found that the influence of family and friends in the decision to purchase protection insurance is a significant influencing factor, and could be a useful route to reaching underserved communities.
In its annual consumer research report, Pacific Life Re explored how the industry is serving different customer segments and what prompts purchases, as well as identifying the barriers to buying protection. After interviewing more than 2,000 adults spread across various demographics, Pacific Life Re found that the influence of family and friends was one of the top three reasons for purchasing protection insurance. The research also showed that consumers whose own parents had protection insurance were more likely to have it for themselves, and that this ‘parental factor’ was a more significant driver for purchasing protection than a mortgage.
At the recent Shaping the Future of the Protection Market seminar held in London, this issue was discussed. Peter Hamilton, head of market engagement at Zurich & Government disability and access ambassador for the insurance sector said, “The interaction between insurance companies and their customers has changed dramatically over the years. In the era of ‘Home Service’, where premiums were collected on the doorstep, advisers would have weekly or fortnightly contact with their customers, giving them a deep understanding of their customer’s changing circumstances, witnessing firsthand how their lives unfolded. Customers saw them as advisers, confidantes and friends. Although the ‘Home Service’ model has long gone, there are lessons we can learn in terms of the value of creating intergenerational loyalty amongst families, the importance of keeping in touch, and the influence of friends and family in the buying process.”
Though getting a mortgage was the most important trigger to buying protection insurance, as Rose St Louis, protection director at Scottish Widows commented, “Only 15-20% of banking customers have a mortgage so if we’re waiting for them to take out a protection policy then we’re missing 80-85% of our audience. We need to work harder to reach people via channels they use day-to-day. The industry needs to engage in places where it wouldn’t normally such as TikTok and other social media to reach the younger audience. We need to go and look for these customers as they won’t automatically come and find us.”
Carrie Johnson, customer lifestage director at Royal London added, “We need to do some myth-busting around protection. Customers need to understand that there are now policies that cover pre-existing health conditions or circumstances. We’ve done some great work to improve protection products, but we must go out and tell people that insurance is for them and it’s available.”
Richard Purcell, client solutions director, protection at Pacific Life Re said, “With the impact of the Consumer Duty Act we wanted to see how well customers were being served by the protection market. An unexpected and interesting finding was the impact that friends and family had on the protection buying process, and a really useful insight in how we make protection insurance more widely available.”
The full report Beneath the Surface: Serving the Underserved can be found at Beneath the Surface (pacificlifere.com).