Why they buy: term life insurance in Germany from the consumer's perspective

A unique Swiss Re study – in partnership with the University of St Gallen – analyses why German consumers choose one term life insurance product over another. The findings reveal useful insights for insurers looking to gain a competitive edge in product design.

Opinion surveys often show consumers saying that they'd be willing to purchase life insurance – often at a price higher than the market average. Yet insurance sales figures don't reflect these claims. The key objective of Term life insurance in Germany: the consumers’ perspective – a need for preferences-orientated product design? (PDF, 1.17 MB) is to simulate realistic purchasing situations, reflecting how people behave when faced with various options. 

Gaining a deep insight

The results demonstrate that, indeed, 59% wouldn't purchase any of the products on offer. Not surprisingly, most people who would purchase place the monthly cost as their primary driver in decision making.

But it's where Germany's consumers are willing to pay extra which reveals fascinating insights for product development:

  • Consumers would be willing to pay EUR 17 extra a month on average to go with a well-known brand insurer
  • To move from having a medical examination before buying the product, to a one-year period in which no claim can be made from the start of the contract, consumers would pay an average of EUR 6 extra per month
  • Dealing with a human, rather than purchasing solely over the internet, would be worth EUR 10 additional premium per month on average

Encouraging protection

"It's insights like these that can help insurers with a focus on product innovation really differentiate themselves in the market," explains Bruce Hodkinson, Head of Life & Health Mediterranean and Europe at Swiss Re. "By working together with our valued clients, we'll explore how these findings can encourage more people to financially protect themselves against life's misfortunes."

For a more in-depth insight, see Term life insurance in Germany: The consumers’ perspective – a need for preferences-orientated product design? (1.17 MB) or contact your Swiss Re representative.

Published 15 April 2014

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