Me first blog on Accenture’s recent survey of more than 22,000 European consumers showed how COVID-19 reformed insurance claims.
Consumer expectations and preferences change in different ways, although this shift varies between different types of consumers. Age, gender, location, income level and occupation all influence insurance expectations. However, the most important determining factor is personality.
To better understand how personality traits affect insurance preferences, we divided our sample into four “personas”: pioneers, skeptics, pragmatists, and traditionalists.
We placed consumers in one of these categories, based on 60 variables that deal with lifestyle, online skills, perceptions of financial service providers and expectations around new services.
In this way, we have come to the conclusion that 41 percent of Europeans are skeptics, 23 percent traditionalists, 22 percent pragmatists and 14 percent pioneers.
Analyzing our survey data using these groups provides fascinating insights. In the first place, we can discover what is especially important for certain consumer groups. Second, by repeating this analysis over time, we can determine how personality traits shift, and better understand the implications for insurers.
A large minority of consumers still dislike digital
The four person groups have very different preferences for how they deal with insurers. Use mobile channels such as smartphones and tablets. The use of mobile devices has increased in the last two years in all European consumers surveyed.
However, while 91 percent of the pioneers interact with their insurer at least once a year via online mobile channels, only 68 percent of Skeptics and 62 percent of the Pragmatists do. For traditionalists, the figure is just 19 percent.
Consequently, insurers need to ensure that consumers can communicate with them in different ways. Although digital engagement is on the rise, a significant minority will not use the channel – or not.
The demand for personal solutions is concentrated among progressive personality types
Another topic my first blog discussed was the growing appetite for personalized insurance solutions. It can be pay-as-you-gogo car insurance, medical insurance where premiums are linked to a healthy lifestyle or another form of insurance tailored to consumers’ needs.
The analysis of the recording data through the lens of the four personas shows that this appetite for personalization is very different. For example, 82 percent of the pioneers showed interest in home security cyber insurance where premiums were linked to the use of the latest virus protection software and password managers, compared to only 54 percent of Pragmatists, 45 percent of skeptics and only 25 percent of traditionalists.
At the same time, 89 percent of the pioneers and 86 percent of the practitioners are interested in car insurance against compensation, compared to 73 percent of skeptics and 72 percent of traditionalists.
Decline of the traditionalist
Our survey data helps us to understand how insurance expectations and preferences differ between consumer groups, and how the size of the groups changes.
In Europe, Pioneers and Skeptics have grown by 4 and 10 percentage points, respectively, over the past two years – with the increase in the ratio of skeptics driven by a decline in consumer confidence: only 31 percent of European consumers trust their insurer ‘much’ around two years ago at 40 percent to see their data. Similarly, only 21 percent trust their insurer ‘much’ to look after their long-term financial well-being, compared to 26 percent two years ago. (My third blog will explore this dimension of trust in more detail.)
In comparison, the share of Pragmatists decreased by 2 percentage points and the share of Traditionalists by 12 percentage points. The sharp decline in traditionalists is due to a rapid increase in the share of consumers who use mobile devices for various activities. For example, 72 percent of Europeans use a smartphone or tablet to contact banks and insurers to learn more about new services and products; two years ago, only 59 percent did so. And 49 percent say today that their phone is the most important device for accessing information and doing online transactions, compared to 37 percent two years ago.
It is important to monitor how the size of these persona groups changes. Traditionalists, for example, are the biggest aversion to the use of digital engagement channels; However, as the weight of this segment shrinks over time, so will the general aversion of consumers towards digital.
A continent of skeptics?
Another interesting finding is that Europeans tend to be much more skeptical than the other nationalities surveyed. In twelve of fourteen European countries, skeptics were the largest group. The exceptions were Germany and Russia.
In contrast, Pioneers are the largest group of people in all the countries in the Middle East and Latin America surveyed – and they are proportionally even larger in Asia. Many factors influence the uptake of digital channels, but the dominance of Pioneers in Latin America and the Middle East partly explains why digital use is widespread there.
There are also interesting deviations within Europe. In Nordic countries such as Denmark, Norway and Finland, pragmatists are responsible for at least 30 percent of the population. However, the share of Pragmatists in Germany and Belgium drops to 20 percent, and in France only 7 percent.
Most insurers do not categorize their customers into personality types like these, but the insights generated by our analysis show that they should try to group consumers based on certain characteristics and communicate with them in different ways.
While it does not allow for fully personalized experiences, such an approach will help create more customer-focused and compelling consumer experiences – and ultimately a more profitable outcome for insurers.
Read us for more information on consumer preferences and trends in insurance Insurance Consumer Studies Report.