The reinsurer’s latest study Life insurance: focusing on the consumer study found the public increasingly wants to be “empowered” to make informed decisions rather than “sold” life insurance.
Most households surveyed across the world were still underinsured due to concerns around value for money, perceived lack of need, product complexity, “cumbersome” buying processes and lack of trust in the industry.
“Better knowledge of people’s behaviours and needs will enable the insurance industry to provide improved quality and coverage” said Thierry Léger, head of Swiss Re life and health products.
Almost half (46%) of UK consumers said they did not purchase life insurance as it was too expensive, while over a fifth said they ‘did not need it.’
Many consumers turn away from buying life insurance simply because they don’t fully understand the benefits of it or are put off by a lengthy and convoluted buying process, Swiss Re said.
Sales agents remain the main channel of life insurance product sales the world over. However, increasingly, the consumer wants to research options and make proactive buying decisions based on “objective information from unbiased sources and trusted peers”.
Swiss Re said: “In this environment, the challenge, and opportunity, for insurers is to change their approach so that their products and services are ‘bought, not sold’.”
This report said insurers should consider simplification of product design, streamlining the underwriting process, improving consumer communication and education, building long-term relationships with consumers.
With the growth of mobile and internet technology, insurers should be innovative in the use of different distribution platforms, the report also said.
“A very large proportion of consumers can be described as ‘non-shoppers’ when it comes to life insurance” said Milka Kirova, co-author of the study.
“If insurers understand the reasons for this, they will be better positioned to design products that people want and make life insurance more accessible for all. In turn, increased uptake of life insurance improves individual and societal welfare.”
