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Consumer views of COVID-19 in 2021: Progress, and the path ahead

It’s perhaps not the easiest time to be an optimist. But even amid some recent setbacks in our battle against COVID-19, I see many encouraging signs. Governments across Asia Pacific are demonstrating remarkable determination in their effort to bring outbreaks under control. Vaccine rollouts are accelerating, and in many economies, attention is turning to reopening plans. The region’s underlying resilience gives me every confidence it will soon be back to business, and to building prosperity.

New research from the Swiss Re Institute shows I’m not alone. This year's COVID-19 consumer survey, which provides a snapshot of how sentiment is holding up, highlights that while financial anxiety remains, there's been a decrease since we first conducted the survey in April 2020. This is particularly evident in markets with improving economic conditions, such as China and Australia.

While this is a welcome development, the economic and health fallout from COVID-19 is still undermining the financial confidence of consumers to a worrying extent. Much of this anxiety is rooted in a perceived lack of protection, which the uncertainty of the past 18 months has pushed higher up the consumer agenda.

Less than a quarter of respondents feel the financial security to confidently manage the impact of an adverse life event. Critical illness and medical costs are two risks to which people feel most vulnerable, yet many lack coverage for just these kinds of eventualities. Just over half of consumers in the region have life insurance, for example, and only 32% are insured against critical illness.  

Rising concerns are pushing more consumers to act. More are reaching out proactively to insurers, and around 30-40% of those who felt inadequately protected indicated they had invested in some form of additional insurance over the past six months. However, the protection shortfall can’t be addressed by consumers alone. It’s our responsibility as an industry to meet them halfway.

Historically, nobody woke up thinking ‘I need to buy insurance today.’ Yet as a result of the pandemic, that’s precisely what’s happening, and we need to rise to the occasion by developing products that are more accessible, affordable and transparent. There are clear steps insurers can take to contribute positively to consumers’ state of mind, and the wellbeing of our region.

Building new platforms for customer engagement

As more consumers reach out to us for guidance, we need to nurture new communication channels, ensuring we’re listening and providing people with information and solutions that directly address their most pressing concerns.

Understandably, in a fragile economic environment, price has become the top consideration when consumers purchase insurance, with 80% of those surveyed naming it as the most important factor in choosing an insurance provider – up from 75% in our previous survey.

The report also shows that because of the pandemic, people are paying greater attention to the details of their policy, seeking products with the widest possible breadth of coverage for disease and other major life events. Offering relevant material that answers common questions and clearly sets out the terms and conditions of coverage, will help encourage uptake and foster loyalty.  

Meeting consumer needs and closing the regional protection gap will require us to answer calls for more digitally delivered services. Next to price, the ability to support online processing is the top factor driving insurance purchase decisions across APAC. Consumers place a high premium on the speed and efficiency digitalisation brings to claims processing and payments.  

The pandemic has also added impetus to the shift from human agents to websites and apps, as the main insurance distribution channels. We expect this trajectory to continue as traditional insurers, banks and agencies all enhance their digital service offerings, and consumers grow more comfortable with new platforms for interaction. It’s notable that 18% of respondents to our survey expressed interest in purchasing insurance through non-traditional channels.

We’ve redoubled our own efforts to develop digitally enabled risk assessment, pricing and claims processing capabilities that make the customer journey smoother and more personalised – all to meet the needs and expectations of an emerging generation of insurance buyers.

Making wellness count

For all this change, the future of insurance will be defined by the integration of online with face-to-face sales, rather than a full-scale digital takeover. As I’ve suggested before, it’s the effective combination of both human and digital that is key to providing optimal products and service experience.

The intersection of digitalisation, and health and wellbeing, is a great example of how human-digital convergence will create areas of opportunity. The survey points to an increased focus on physical and mental health as one positive legacy of the pandemic. Throughout APAC, consumers are becoming more proactive in areas like healthy eating, exercising regularly and adopting better sleep habits.  

We can support this rising awareness, and simultaneously encourage insurance adoption, by offering partial incentives such as refunds to consumers who use digital tools to track and improve their physical fitness. There’s also massive potential to go beyond standard health indicators and build a more holistic picture of customer health by capturing more data on lifestyle risk factors – or what we call the ‘Big Six.’ These include things like mental well-being, nutrition and substance use. Better use of this data can enhance risk assessment and our capacity to tailor products and incentives to individuals, making insurance more personal.

Thanks to this survey, we know what consumers are concerned about, and what they value from us as an industry in the wake of this once-in-a-generation health crisis. In some ways the demands are the same as they’ve always been – a favourable balance of cost and protection, greater convenience, enhanced personalisation, and a level of service that demonstrates genuine care for the end-customer.

What’s new is the way the pandemic has added to the urgency of these demands, and the potential for digital channels and data-enabled approaches to help us meet them. If we seize on this potential and align ourselves carefully to customer goals, we can ensure positive industry and societal outcomes emerge from a difficult period for all of us.

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