Capco, a global and digital consultancy, conducted a survey to gauge Canadians' understanding and impressions of insurance products and services. At least half of the respondents felt uncertain about the options they were given, with 22% indicating that they were ‘not informed’.
These are the barriers that are causing confusion around available insurance products and services, and insurance companies should take them seriously:
Lack of Knowledge
24% of consumers were not sure of insurance products, and the survey found that this understanding of insurance knowledge was defined by a significant gender gap. Canadian women represented the least well-informed demographic globally (43%). Those associated with the insurance sector should make an effort to provide more educational materials that are easy to understand. This can be done by breaking down complicated processes, and providing user-friendly tools and resources that will allow consumers to make a more informed opinion.
Expensive and Complex Products
The survey also highlighted that those in younger generations (Gen Z and Gen Y) find the products expensive and complex. By transferring this insurance data into digital products, these generations would have a better idea of which products better fit their needs and bank accounts. This is a contemporary way to provide information to all consumers, and improve engagement. As the world moves to a more digitized way of presenting information that can be consumed easily, complex products like insurance should follow suit. Insurance companies should adapt their business model and marketing strategies to stay relevant and avoid misinterpretations, including offering more personalized coverage that is affordable and realistic.
Using data to define strategies and products
The survey also highlighted that 90% of respondents were willing to share their data, and lower premiums would give them more incentive to consider insurance products. Consumers who are willing to share their data for better services and products provide significant value to insurance companies. Products that require a lot of financial and statistical data can scare consumers, so providing simple information that educates and informs consumers can produce successful results.
Joanna Lewis, a partner with Capco Canada explains:
“Most consumers are not engaging with their financial products actively, impacting the level of their insurance coverage. Our Canadian and global data reveals confidence, availability of information, and education levels have a dramatic effect on the number of policies owned. We therefore advise insurers to make customer engagement a priority, and one of the ways they can do this is by giving consumers reasons to engage and by demystifying insurance, through simplified offerings, apps and providing personalized insights”.
The Canadian insurance sector should utilize this data and adapt their strategies, giving their customers more to work with and offering informative materials. Doing nothing to help consumers will only lead to more confusion and frustration. In order to stay relevant, ensure growth, and benefit consumers, insurance companies should adopt digitization and simplification into their business models.