Swiss Re COVID-19 Consumer Survey: Japanese consumers most financially stressed and least willing to forego insurance payments than APAC peers

  • Consumers in Japan are feeling most anxious about their financial future – the highest among six APAC markets surveyed
  • Japanese consumers are the least willing to forego their home or motor (10%) and life insurance (14%) policies even during this time of financial uncertainty
  • Customer loyalty in Japan is the highest out of all APAC markets surveyed, with one in three consumers (32%) hesitant to switch policies at this time. Japanese consumers are also the least active (13%) group in searching for new policies
  • The top three concerns in Japan were social disruption (60%), lack of physical fitness (60%) and getting sick (36%). However, mental health concerns induced by social distancing measures was the lowest (33%) among APAC markets surveyed
  • COVID-19 has resulted in consumers being more vigilant about having broader insurance coverage in future

One third of Japanese consumers are feeling anxious and "barely coping" when it comes to their finances as a result of COVID-19, while a further four per cent are overwhelmed and unable to cope. This total of 37% is the highest among six APAC markets surveyed, according to a Swiss Re consumer survey.

The number of people in Japan feeling comfortable and positive about their financial future was the lowest in the region at just 16%. The majority (47%) felt stretched but indicated they were coping, the May 2020 survey showed. When asked what they were most concerned about at this time, 60% of respondents said it was social disruption and change in routine, and their physical wellbeing.

"These results show there is still a real sense of uncertainty and stress among Japanese consumers brought on by COVID-19,” said John Mok, Head of Client Markets Life & Health & Property & Casualty, Swiss Re Japan. “These sentiments are evident when asked what they would be prepared to give up, in order to cut costs. Only 10% said they would let go of their home or motor insurance while 14% would forego their life insurance policy.”

With more consumers (32%) feeling hesitant to switch policies than the rest of all surveyed markets, it is not surprising that only one in eight (13%) searched for new policies, and only one in 14 (7%) eventually bought a new policy at this time. "Interestingly, when Japanese consumers review their own policies or make a claim, many (36%) notice additional benefits such as health management apps and income protection in their insurance plans,” said Mok. “These curious, better informed customers are more open to new product features and ideas, providing more opportunities for insurers to engage them."

The Swiss Re commissioned poll of 500 residents across Japan was conducted by global market research company, Ipsos, in the last week of May 2020. The same survey was conducted in five other APAC markets, including Australia, Singapore, Hong Kong and China's megacities of Beijing and Shanghai in April, and most recently, India in May. The data was collected in Japanese via smartphone, laptop or tablet devices.

While the large majority agreed that insurers were as proactive or more proactive than similar service providers in making contact, one in ten felt otherwise. But while 40% of respondents said insurers were more active, only 14 per cent were contacted by their insurer recently. This is the lowest of any surveyed market. However, from those that were contacted, around one in five (22%) bought a policy.

"There is a clear opportunity for insurers to engage their customers more at this challenging time, to offer support and inform them about features which may be included in their policy. On a positive note, almost one in five (19%) feel that insurers are being flexible as a result of COVID-19 and there's no doubt this is important for consumers at this time," said Mok.

Like their counterparts across APAC, more than half of the Japanese consumers surveyed (58%) said having an insurance policy now eases stress and helps financially. They were unwilling to forego these policies and intend to maintain their premium payments, even over cable TV or internet connection fees.

When it comes to choosing an insurer, Japanese consumers view the inclusion of additional services and the ability to process policies online from start to finish as the two most important features they now look for.  When asked about value-added features, respondents said having priority access to products like face masks and medication would be appealing, followed by immediate financial support – outside of a claim.

Looking ahead, most respondents (59%) in Japan said COVID-19 would make them more likely to purchase online. They will be more vigilant about having a broader range of insurance covers (36%), and more likely to look closely at coverage details (29%).

“It's reassuring to see consumers in Japan and across the region placing a high value and trust on the mitigation effects that insurance offers, especially at a time when their health and financial stability is being challenged,” said Atsuhiro Dodo, Head of Japan, Swiss Re.  “Having a better understanding of our customers' perceptions and needs are vital for us to drive actions to be more resilient in the face of adversity."

 

Swiss Re

The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk – from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally. It is organised into three Business Units, each with a distinct strategy and set of objectives contributing to the Group’s overall mission.

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