Irene Guiamatsia

Key points

• Insurance vs. Investment: Out of the 20 million adult Australians, 6.7 million are covered by some form of life insurance. Despite this significant uptake, life insurance is perceived as a secondary measure of financial security compared to saving and investing habits.
• Brand Influence on Consumer Choice: A robust brand reputation is the foremost consideration for consumers when selecting a life insurance provider, ahead of advisory services and premium costs. Notably, 20% of policyholders intending to switch providers seek assistance with policy cancellation.
• Client Satisfaction and Digital Engagement: Zurich leads with the highest client NPS, while NRMA boasts the greatest client satisfaction for life coverage outside superannuation. These ratings underline a pivotal chance for insurers to intensify digital engagement efforts.

The comprehensive 2024 Consumer Insurance Needs Report by Investment Trends unveils key insights into life insurance trends among Australian consumers, emphasising brand influence, the quest for digital enhancement in client services, and the urgency for streamlined claim processes.

Findings from the report indicate that while a large portion of Australians recognise the importance of life insurance, there remains a gap in perceiving it as a cornerstone of financial stability

“Even with 34% of the adult population holding life insurance, it’s often seen as less integral than other financial tools. This underscores the need for the industry to bolster the perceived value of life insurance in one’s financial portfolio,” asserts Dr Irene Guiamatsia, Head of Research at Investment Trends.

When it comes to selecting an insurance provider, brand strength prevails as a decisive factor, with consumers influenced more by brand recognition than by advice or premiums in their decision-making process.

Guiamatsia adds, “In a market where 800,000 Australians are interested in Total Permanent Disability (TPD) insurance, and 1.8 million are considering Income Protection insurance, the impact of a trusted brand cannot be understated.”

In addressing customer satisfaction, Guiamatsia highlights, “The satisfaction ratings, with Zurich leading on client NPS and NRMA outperforming in life coverage satisfaction outside super, reveal a significant opportunity for life insurers to amplify their digital presence and user experience. Insurers are encouraged to heed these insights and align their digital strategies to meet the evolving preferences of consumers.”

Furthermore, the report reveals that life insurance claims processing takes an average of 7.3 days within super and 5.1 days outside of it, while death benefit claims average around 10 days.

Guiamatsia emphasises the need for a more proactive approach, “Policyholders are clear in their desire for more straightforward and prompt claims processing. A seamless and efficient claims experience is vital for client retention and satisfaction.”

In conclusion, the 2024 Consumer Insurance Needs Report calls on life insurance providers to recognise the nuanced expectations of Australian policyholders. The industry is challenged to enhance brand trust, invest in digital interfaces, and streamline claims to elevate the perceived value of life insurance in achieving financial security.

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