Swiss Re European Insurance Report 2012

Swiss Re sees huge private protection gap among European consumers; life insurance products should become more attractive, more affordable and easier to understand.

Download European Insurance Report 2012 and country-specific reports


Swiss Re's European Insurance Report 2012 highlights potential gaps between the insurance industry's product offerings and current consumer demand. The report includes the results of a survey commissioned by Swiss Re among 15,000 consumers in 14 European countries and presents the following key findings:

  • The main reason for the insufficient market penetration of life insurance is that consumers consider it to be too expensive
  • The industry should look to develop products to fill the gaps taking into account the consumers' price sensitivity
  • The insurance industry and governments should work together and build awareness to the benefit of consumers

Europe's consumers under-insured by EUR 10,000 billion

Swiss Re has calculated a mortality protection gap amounting to sums assured of more than EUR 10,000 billion across all 14 European countries featured in the report. The gap is the difference between the money needed by dependents in the event of the untimely death of a breadwinner and the financial provisions put in place should the unexpected occur.

The financial crisis and related savings programmes have had a serious impact on public trust in state pensions and benefits, and consumers have grown aware of the necessity for private provision. Even so, they are reluctant to buy insurance products for the following main reasons:

Cost – insurance cover is considered too expensive

The Swiss Re European Insurance Report 2012 (PDF, 989 KB) reveals a huge need for protection, and the Life & Health insurance industry is in a unique position to close this gap at affordable prices for consumers.

The main reason for the insufficient market penetration of life insurance is that many consumers cannot afford it. But the survey also shows that for countries in the eurozone, where level term life insurance is a relatively well-known product, consumers are willing to pay between 22 and 30 euros a month for life insurance cover of EUR 100,000.

The industry should highlight that even a low level of cover is better than none. Consumers are often willing to put aside small amounts to provide for difficult situations in the future.

Making products easier to understand

There are two main items for insurers to consider regarding complexity. The first is the formulation of insurance terms and conditions and product details, the second one concerns the actual application process. Both aspects provide a touch point at which consumers can withdraw from a potential sale.

Simple and transparent products, and a smooth buying process, are essential for successful distribution.

Access – trust is the key

The way in which a product is distributed has a strong bearing both on how comfortable consumers are when taking out life insurance and on their confidence in the actual product.

Surprisingly, the internet is the most trusted source of advice, followed by the insurance company itself. Banks are ranked fifth, indicating a relative lack of trust which is likely to be a consequence of the financial crisis.

Most consumers would be very or fairly comfortable taking out cover through comparison websites on the internet or through their employer, followed by traditional sales channels such as independent advisors and insurance sales staff.

Partnering to close the welfare gap

The insurance industry needs to become the first port of call in those areas where the state decides to cut back. In order to achieve this, insurers need to work in unison with the state to educate consumers and highlight alternative ways to fill the gap between state provisions and consumers' needs.

European Insurance Report 2012: Customers for Life

Bruce Hodkinson, Head Swiss Re Life and Health Continental Europe business

The findings in the full report entitled European Insurance Report: Customers for Life will be presented today at the Munich stop of the Swiss Re European Life and Health Tour. Senior representatives from Europe's leading life companies will attend the event.

Bruce Hodkinson, Head of Swiss Re's Life and Health Continental Europe business, says: "We need to educate consumers in the area of life insurance and make sure that they know where changes in the welfare system could impact their own circumstances. This will ensure that they have the necessary information to seek complementary solutions."

"The industry should also look to develop products to fill the gaps. It is important that there is focus first on understanding consumer needs and then on providing a value for money proposition to meet these needs. This is an opportunity for our industry to increase our visibility with the general public and to prove our potential."

Find out more

Bruce Hodkinson, Head of Swiss Re's Life and Health Continental Europe, and Markus Unterkofler, Head of Client Management L&H Germany and project leader, on the key findings of the European Insurance Report and the country-specific "Spotlight" reports on Germany, France, Poland and Netherlands.

Published 19 September 2012

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