Concerns about financial instability and health conditions – especially among younger consumers – have intensified in emerging markets, increasing the willingness to buy insurance products. This is one of the findings of the second edition of the EY Global Insurance Consumer Survey, among 4,200 consumers in seven countries in Africa, Asia, and North and South America.
The research examines the widening consumer protection gap in emerging and developed markets, highlighting the ways in which the COVID-19 pandemic has affected consumers’ financial risks and insurance preferences.
Demographics determine the economic hardship caused by the pandemic
According to the survey, consumers in emerging markets experienced deeper economic impacts from the COVID-19 pandemic than those in developed markets. 78% of consumers in emerging markets needed to raise their savings, 61% saw their income shrink and 54% were forced to leave some unpaid bills, compared with 33%, 30% and 22% respectively. of consumers in developed markets. In addition, in emerging markets, where vaccination rates are significantly lower than in developed countries, concerns about the loss of a loved one, but also about financial well-being, are significantly higher.
The demographic analysis of consumers in each market explains how COVID-19 affected their economic stability. Consumers in emerging markets are younger (75% are under the age of 44 and only 3% are retired), and do not have a sufficient financial “cushion” or the necessary insurance coverage. For example, only 10% have $ 100,000, or more, in investment assets (compared to 37% in developed markets), while only 56% of homeowners have coverage for their home (compared to 88% in developed markets).
Consumers in emerging markets have a strong intention to invest in insurance products
Overall, consumers in both emerging and emerging markets have expressed interest in short-term protection products, such as insurance coverage for training programs or credit card bills in the event of job loss. However, among the eight insurance products included in the survey, the desire to buy a product is almost double that of consumers in developing markets compared to those in developed markets.
Typical examples are:
61% of respondents in emerging markets are interested in buying life insurance, compared to 22% in developed markets.
Consumers in developing markets are 30% more likely to be interested in an insurance product that covers medical expenses than those in developed markets.
88% of consumers in developing markets are interested in an insurance product that provides them with income for three months if they lose their job, compared to 47% in developed markets.
As an alternative to the market for insurance products from traditional operators, consumers in emerging markets have expressed interest in purchasing embedded insurance policies. 47% of consumers expressed strong interest in concluding an insurance agreement with a healthcare organization / hospital chain, 25% with a hospitality company, 23% with a large technology company and 21% with the government. In addition, more than half (53%) of consumers in emerging markets were willing to share personalized contact information with an insurance company or financial institution, in exchange for support for achieving their individual savings targets, compared to 25% in developed markets.
Corporate social responsibility plays an important role in consumer choices in emerging markets
The research also highlights that the COVID-19 pandemic, along with other events of last year, boosted consumers ‘interest in corporate social responsibility (CSR) and their expectations of companies’ contribution to society. 59% of consumers worldwide are well aware of the insurance corporate social responsibility policy of their insurance providers, with consumers in emerging markets becoming more aware of their social commitments. On average, 56% worldwide did at least some CSR-related actions involving insurance or other financial products. Reputation is the most critical factor, with a quarter of respondents saying they chose one insurance company over another because of the reputation it has developed for CSR issues.
Commenting on the findings of the research, Mr. Lambros Gogos, Partner in the Consulting Services Department of EY Greece, and Head of Insurance Services of EY Greece and EY Central, Eastern, Southeastern Europe and Central Asia (CESA), said: Global health research shows that the phenomenon is significantly more pronounced in emerging markets, where insurance coverage levels are currently lower, insurance companies should study and understand new goals, but also the needs of consumers, especially young people, who are now choosing digital channels of communication to build long-term partnerships with them, and they must also realize that their the choices of consumers, who now di they are increasingly shaping the preferences around the long-term value that companies create for their stakeholders “.
For more information, visit: ey.com/en_gl/insuranceconsumersurvey.
Source: Capital
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