Swiss Re COVID-19 Consumer Survey: Almost one-third of Southeast Asia Consumers Fear their Financial Future
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- Less than a third of policy holders feel sufficiently covered by insurance; Indonesians feel least protected.
- More than half searched for new policies and 37% bought a new policy with Thailand being the most active market.
- Nearly half are open to buying more policies as a result of the pandemic
- Existing insurers have the advantage for new policies with over 60% preferring to stay with their existing insurers
Nearly a third of consumers polled in four Southeast Asian markets felt overwhelmed or anxious about their financial future as a result of the COVID-19 pandemic. Residents in Malaysia, Indonesia, Thailand and Vietnam were also actively engaged with insurers to explore protection options, a new "Swiss Re COVID-19 Consumer Survey" shows.
"The pandemic has certainly deepened financial insecurity across Southeast Asia," said Jolene Loh, Head Client Markets Life & Health, Southeast Asia. "Our research reveals that even among those who currently own insurance policies, 34% of them still felt insufficiently covered. It's particularly apparent in Indonesia with over half (53%) of the respondents feeling this way."
"As a result, this financial anxiety has led to active consumer engagement with insurers. This presents a unique opportunity for insurers to enhance societal resilience amid this unprecedented crisis."
The pandemic drives active consumer engagement in insurance
The research reveals that 58% of surveyed consumers across the region actively searched for new policies during the pandemic, while more than one-third (37%) bought a new policy. Thailand was the most active market whereas Malaysia has a subdued level of activity in comparison.
Across all markets, 28% of respondents have made claims since the COVID-19 outbreak. The majority of the claims are related to health insurance, followed by income protection and life insurance. When it comes to the claim processes, three in four (76%) felt that it helped to ease their stress and provide financial support, and that the claims experience matched or exceed their expectations.
"Insurers are providing the support that consumers need most during this difficult time. A large majority (63%) of consumers were contacted by insurers since the pandemic and one-third received health advice or offers for new COVID-19 related policies."
Almost half (46%) of the consumers are open to buying more policies as a result of the pandemic. Those who have been contacted by the insurers show an even higher intention to purchase.
Addressing changing consumer preference in insurance products
When it comes to purchasing or renewing policies, Southeast Asian consumers are largely loyal to their insurers. Over half (62%) of them would consider staying with their existing insurers with consumers in Thailand being the most loyal (69%).
Although pricing is the most important factor when looking for an insurance offer, each market also has their own preference. Indonesians value inclusion of additional services while in Vietnam, they value online accessibility. Additional coverage is attractive to those in Thailand and Malaysia.
"The pandemic has accelerated the digitalisation journey of insurance. Apart from offering consumers the ability to make purchase and claims online, insurers can consider offering bundled products with flexible options to better address the needs and preferences of customers in the region."
According to the research, 60% of respondents are open to buying insurance online but agents and brokers still play a strong role, especially in Malaysia – where respondents said it was important to speak to an insurance specialist for the right advice.
COVID-19 has clearly had an impact on consumers' priorities with increased interest in medical (51%), critical illness (42%) and life insurance (40%). Many also cited more flexible conditions (60%) and faster claims processes (58%) as improvements in the case of similar future events.
The Swiss Re commissioned poll of 2,000 residents in Indonesia, Malaysia, Thailand and Vietnam was conducted by global market research company, Ipsos, in May 2020. The same survey was also conducted in other Asia-Pacific markets, including Australia, Singapore, Hong Kong and Mainland China in April, as well as India and Japan in May. The data was collected in local language via smartphone, laptop or tablet devices.