Other parts of this series:
My first blog on Accenture’s recent survey of over 22,000 European consumers showed how COVID-19 has reshaped insurance demands.
Consumer expectations and preferences are changing in distinctive ways, although this shift varies across different types of consumers. Age, gender, location, income level and occupation all influence insurance expectations. However, the most important determinant is personality.
To understand better how personality traits influence insurance preferences, we divided our sample into four “personas”: Pioneers, Sceptics, Pragmatists and Traditionalists.
We placed consumers into one of these categories based on 60 variables that cover lifestyle, online proficiency, perceptions of financial services providers and expectations around new services.
In this way, we concluded that 41 percent of Europeans are Sceptics, 23 percent are Traditionalists, 22 percent are Pragmatists and 14 percent are Pioneers.
Analysing our survey data through the lens of these groups offers fascinating insights. First, it lets us unearth what is particularly important to certain consumer groups. Second, by repeating this analysis over time, we can determine how personality traits shift, and better understand the implications for insurers.
A large minority of consumers are still averse to digital
The four persona groups have radically different preferences for how they engage with insurers. Take the use of mobile channels like smartphones and tablets. The use of mobile has surged in the past two years across all surveyed European consumers.
However, while 91 percent of Pioneers interact with their insurer via online mobile channels at least once a year, only 68 percent of Sceptics and 62 percent of Pragmatists do. For Traditionalists, the figure is just 19 percent.
Consequently, insurers need to ensure that consumers can communicate with them in a variety of ways. Although digital engagement is rising, a sizeable minority either won’t use that channel – or can’t.
Demand for personalised solutions concentrated amongst progressive personality types
Another topic that my first blog covered is the growing appetite for personalised insurance solutions. This might be pay-as-you-go automotive insurance, medical insurance where premiums are tied to healthy lifestyles or some other form of insurance tailored to consumers’ needs.
Analysing the survey data through the lens of the four personas shows that this appetite for personalisation varies considerably. For example, 82 percent of Pioneers expressed interest in cyber-security insurance for the home where premiums are tied to using the latest virus protection software and password managers, compared with only 54 percent of Pragmatists, 45 percent of Sceptics and just 25 percent of Traditionalists.
In parallel, 89 percent of Pioneers and 86 percent of Pragmatists are interested in pay-as-you-go automotive insurance, compared with 73 percent of Sceptics and 72 percent of Traditionalists.
Decline of the Traditionalist
Our survey data helps us understand how insurance expectations and preferences vary across consumer groups, and how the size of those groups is changing.
In Europe, Pioneers and Sceptics have grown by 4 and 10 percentage points respectively in the past two years – with the increase in the ratio of Sceptics driven by a decline in consumer trust: just 31 percent of European consumers trust their insurer “a lot” to look after their data against 40 percent two years ago. Similarly, just 21 percent trust their insurer “a lot” to look after their long-term financial wellbeing, compared with 26 percent two years ago. (My third blog will explore this trust dimension in more detail.)
By comparison, the proportion of Pragmatists has decreased by 2 percentage points and the proportion of Traditionalists by 12 percentage points. The sharp decline in Traditionalists is due to a rapid rise in the proportion of consumers who use mobile devices for various activities. For example, 72 percent of Europeans use a smartphone or tablet to connect with banks and insurers to learn about new services and products; two years ago, just 59 percent did. And today, 49 percent say their phone is their principal device for accessing information and transacting online, compared with 37 percent two years ago.
It’s crucial to monitor how the size of these persona groups is changing. Traditionalists, for example, are the most averse to embracing digital engagement channels; however, as this segment’s weighting shrinks over time, so too will consumers’ overall aversion to digital.
A continent of sceptics?
Another interesting finding is that Europeans tend to be much more sceptical than the other nationalities surveyed. In twelve of fourteen European countries, Sceptics were the largest group. The exceptions were Germany and Russia.
In contrast, Pioneers are the largest persona group in all surveyed countries in the Middle East and Latin America – and are proportionally even larger in Asia. Many factors affect the uptake of digital channels, but the dominance of Pioneers in Latin America and the Middle East in part explains why digital usage is more widespread there.
There are also interesting variances within Europe. In Nordic countries like Denmark, Norway and Finland, Pragmatists account for at least 30 percent of the population. However, the proportion of Pragmatists falls to 20 percent in Germany and Belgium, and just 7 percent in France.
Most insurers don’t categorise their customers into personality types like these, but the insights generated by our analysis shows that they should try to cluster consumers based on certain characteristics, and interact with them using different methods.
Although that wouldn’t enable fully personalised experiences, such an approach would help to create more customer-centric and compelling consumer experiences – and ultimately a more profitable outcome for insurers.
To learn more about consumer preferences and trends in insurance, read our Insurance Consumer Study Report.