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Consumers seek more protection in wake of COVID: survey

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The COVID-19 pandemic has sparked a shift in consumers’ views on insurance protection, with many attaching greater importance to getting adequate cover, a Swiss Re survey has found.

About 30-40% of 7000 consumers in Australia and 11 other Asia Pacific markets who expressed fear of insufficient life and health protection have bought new or additional policies in the last six months, according to the survey.

Some 41% of them signed up for new or extra income protection products, 38% went for critical illness cover and 30% focused on life insurance.

When asked if they felt financially secure to manage occurrence of an adverse life event, only 23% say yes, 32% are moderately secure and 13% have no confidence at all.

“Many people own medical and life insurance but still have a feeling of being under-insured,” Swiss Re says.

“COVID-19 has exposed shortfalls in consumers’ insurance protection and triggered reprioritisation of policy importance.”

Income protection, critical illness and medical reimbursement are the three areas where people feel most inadequately protected. They would like to have more medical reimbursement, critical illness and income protection coverage.

About 48% believe they are under-insured for income protection, 31% for critical illness, 30% for medical insurance, 23% for life insurance and 22% for personal accident.

Swiss Re says the perceived shortage has triggered more active insurance purchases.

There is an opportunity for insurers to respond to the growing demand for insurance protection.

“Given the financial stress inflicted by the pandemic, it is likely many consumers have not been able to purchase the level of protection that they would like to have for peace of mind,” Swiss Re says. “Hence, there is still a high percentage of perceived shortfall.

“This is an opportunity for insurers to fill a protection gap by providing easily accessible, affordable, and attractive policies to increase consumer uptake and cross-sales of different lines of [life and health] business.”

Swiss Re carried out the survey in the January-February period. About 500 respondents are from Australia and the rest from New Zealand, China, Hong Kong, India, Indonesia, Japan, Singapore, Thailand, Malaysia, Vietnam and South Korea.

The survey aims to provide insights into how COVID-19 has affected consumer behaviour and resulting implications for insurers.

Click here to download the report.