Jennifer McSpadden

Retirement preparedness among Australians has reached its lowest point in 10 years, according to the Brighter Super & Investment Trends 2024 Retirement Income Report^[1].

The report, is a comprehensive snapshot of Australians’ retirement needs, conducted in July and August 2024. It reveals the gap between pre-retirees’ expected retirement income and what they believe they will need in retirement has widened to 31%.

The average number of concerns confronting retirees has also risen dramatically in the past 12 months.

Inflation is now the top concern for pre-retirees, while health is the number one concern for retirees.

“The report makes it clear that inflation and cost-of-living pressure are having a major impact on both retirees and those approaching retirement,’’ Brighter Super Head of Retirement Jennifer McSpadden said.

“What is also clear is the unique role super funds play in securing Australians’ financial futures,’’ she said. “It reinforces the direct link between receiving financial advice and securing a better retirement outcome but finds a significant number of Australians have unmet advice needs.’’

Seeking advice pays off for pre-retirees

The report reveals that pre-retirees who seek information and guidance on retirement and act on it, feel more prepared.

“Taking action positively correlates with a greater feeling of preparedness,” says Dr Irene Guiamatsia, Head of Research at Investment Trends.

“Pre-retirees who seek and then act on information about retirement feel more prepared than those who take no action at all. The challenge for super funds is to motivate large numbers of members to take specific actions—like making voluntary contributions and seeking advice – that can lead to genuine financial readiness, not just a sense of preparedness,’’ she said.

Super funds receive high composite satisfaction scores from both pre-retirees (59%) and retirees (71%). The report also identifies super funds as the most popular source of retirement information for pre-retirees but finds significant advice gaps.

However, half of all super fund members are unaware that their main super fund offers financial advice. Two-thirds of pre-retirees are not sure whether their super fund offers pension products, while four out of five pre-retirees report advice gaps on retirement planning, growing their superannuation and investment strategies.

One third of pre-retirees are uncertain about what action they will take when they reach the preservation age when they can gain access to their superannuation.

Some pre-retirees are considering making voluntary contributions to super or delaying their retirement to ensure they have enough for a comfortable lifestyle once they finish work. Others are consulting a financial adviser to maximise their retirement savings.

Almost half of pre-retirees feel unprepared for retirement

Concerns about financial readiness have increased sharply with only 29% of pre-retirees feeling they are prepared for retirement in 2024, compared with 41% in 2023. The number of pre-retirees feeling unprepared for retirement rose to 47% in 2024, a 7 percentage-point increase on 2023.

Retirement confidence has declined dramatically in the past 12 months with the funding gap between anticipated income in retirement and what pre-retirees think they will require rising to $1300 a month, with 62% of pre-retirees expecting a funding gap.

In 2024, only 23% of pre-retirees believed they would be able to live comfortably in retirement (down from 33% in 2023), while 34% expect they will be able to afford only basic living expenses, with little left over for extras.

Pre-retirees nominate the rising price of goods and services as their number one concern (57%) followed by not enough money to retire on (50%).

Retiring later than planned and making voluntary contributions to super were the most common actions pre-retirees said they would consider closing the retirement income gap. The survey found 17% of people had retired later than planned.

While health has become the top priority for retirees, inflation and rising cost of living prices are now their second biggest concern.

Despite these financial pressures, retiree confidence remains steady, with 60% expressing confidence in their retirement finances, an increase from 58% in 2023.

However, the proportion of retirees reporting they were living comfortably fell 7% points over the past 12 months to 53%.

The Government Aged Pension remains the primary safety net of choice for retirees, with almost three-quarters indicating they would rely on it if their savings were depleted.

Super balance and home ownership bring retirement comfort

Building up super is critical for pre-retirees with the survey finding a direct correlation between the size of their super balance and their preparedness for retirement.

Of respondents with less than $100,000, only 16% said they were prepared while 69% of those with balances between $1million and $2.5 million and 78% with balances above $2.5 million said they were prepared.

Home ownership is also critical to retirees’ comfort in retirement. Retirees who own their homes are significantly more likely to live comfortable retirements than those who are still paying off a mortgage or those that are renting.

More than half (58%) of retirees who owned their homes outright reported living comfortably in retirement. Only 30% of retirees paying off a mortgage say they are living comfortably. Renters face the toughest challenge, with just 18% feeling comfortable.

For pre-retirees home ownership also influences retirement readiness. Those who own their homes outright also feel more ready for retirement (46%) than those who are paying off mortgage (31%) while renters feel the least prepared (9%). 3

Advice retirees would give to their younger selves

Retirees rank contributing more into super as the number one piece of advice they would give their younger selves in preparing for retirement. Other advice would be to reduce spending and moving to investments with higher returns.

Many retirees are happy with their choices with 39% saying they would not do anything differently.

Brighter Super moves to close information gap and boost retirement product offering

Ms McSpadden said Brighter Super was making a significant investment in member education, including webinars and face to face events around Queensland and had appointed former Sunrise host David Koch as Retirement Advocate to encourage members to engage with their super fund and seek financial advice.

Brighter Super in October won the member education category in the Super Review 11th annual Super Fund of the Year Awards, 2024.

Brighter had also unveiled a new retirement income product, Retire Easy, and boosted its Retirement Reward.

———-

Notes:
[1] Methodology: The information in this document is based on a quantitative online survey of 5,315 Australian adults aged over 40 conducted by research partners Investment Trends between July and August 2024. Comparisons have been drawn from previous surveys conducted by Investment Trends. The survey was conducted in two phases, a main industry-level survey of Australian adults sourced from a broad-based survey of the Australian adult population, supplemented with respondents from the Investments Trends opt-in panel. An additional sample of respondents was invited to the survey from a range of Investment Trends’ institutional clients. They reflect the demographic profile of members holding an account with these institutions and were included in the survey, where appropriate, to conduct detailed analysis of particular sub-groups for which they are representative. The maximum sampling error (centre of the range) at the 95% confidence interval is +/-1.2%. Analysis of subgroups will have a higher sampling error. Where appropriate respondents were post weighted slightly to ensure distribution by sample, age, gender, location, superannuation fund type superannuation balance and age pension coverage.

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Irene Guiamatsia

Two years on from the Retirement Income Covenant coming into force, research from leading financial insights firm Investment Trends highlights the stark disconnect between the income sources pre-retirees expect to rely on and the reality faced by those already in retirement.

As Australia – and the rest of the world – prepares for retiring baby boomers, the findings highlight the vital pillar our superannuation system is to supporting members in preparing for retirement.

The research reveals that pre-retirees expect their superannuation savings will contribute on average 30% of their retirement funding. The spouse/partner’s super is expected to account for 16% and household savings and investments expected to play a substantial role, contributing 25%.

The reality for retirees bears one similarity and several differences to those expectations. The contribution of their own superannuation is the only estimate pre-retirees get right – 29% of retirees’ income comes from this.

Retirees, however, find themselves relying more on social security entitlements (23% of retirement income) —a source many pre-retirees significantly underestimate.

“There’s a clear gap between expectation and reality, on a few levels,” said Irene Guiamatsia, Head of Research at Investment Trends. “Whether it’s the actual income required, the mix of funding sources to generate that income (chart shown) or even the preferred retirement lifestyle itself. But superannuation is the unwavering pillar members know they can rest on as they transition to the reality of retirement.”

Guiamatsia suggests super funds have the opportunity to take a more active role in equipping pre-retirees with the knowledge they need to be better prepared for the reality that awaits by, for example, providing information on how superannuation interacts with social security.

“This is about empowering members to make better choices and take control of their future. Understanding how different income sources come into play can help pre-retirees to take action now to maximise their retirement income in the future,” concluded Guiamatsia. 

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Irene Guiamatsia

Investment Trends, a leading financial services research firm, has released its 2024 Adviser Business Model Report, offering crucial insights into the evolving landscape of financial advisory practices in Australia. The report highlights significant trends, market opportunities, and the strategic shifts advisers are making to navigate a dynamic environment.

The report shows financial advisers have experienced substantial client attrition due to recent fee increases, reducing the average client book from 120 clients in 2023 to 99 in 2024. Despite this, the quality of client relationships has improved, with higher inflows and total funds under advice. The average level of new client inflows has also risen to $6.6 million from $6.0 million in 2023, indicating a healthier, more engaged client base.

“The changes advisers have made in their practice operations are a clear signal of a deliberate shift towards quality over quantity in client relationships,” said Irene Guiamatsia, Head of Research at Investment Trends. “Advisers have however not lost sight of – and in fact are doubling down on – the imperative for enhanced efficiency as a means to deepen client engagement and create a more personalised client experience.”

The report also highlights a significant increase in practice profitability, with a small group of advisers reporting profit margins exceeding 40% for FY23. These best-in-class advisers attribute their success to stringent cost discipline and strategic fee increases. This trend is further supported by the continuous rise in funds under advice, now averaging $69 million, up from $63 million in 2023.

“Fee increases have provided a strong foundation for the rise in practice profitability which we’ve seen across the sector for the second year running; But we find that practices that vastly lifted their bottom line were those with a near-ascetic approach to cost management,” noted Guiamatsia.

The report also uncovers significant gender differences in how advisers manage their practices. Female advisers are 25% more likely to adopt a life stage mindset when advising clients, focusing on pre-retirees and retirees. This contrasts with their male counterparts, who are 30% more likely to describe their client focus based on their wealth bracket and focus on affluent clients.

Additionally, 65% of female advisers feel less unsettled by regulatory changes compared to 45% of male advisers, indicating a resilience that may offer a competitive edge in the evolving regulatory environment.

“Female advisers’ approach to client relationships and their resilience to regulatory shifts present unique opportunities for differentiation,” Guiamatsia added. “These strengths can be leveraged by advice practices to better meet the diverse advice needs of Australian consumers.”

The 2024 Adviser Business Model Report provides deep insights into business models, operating models, and client engagement trends for advice practices. By understanding and adapting to these key trends, licensees can better position themselves to capitalise on emerging opportunities and future-proof their businesses.

About the report

The Investment Trends 2024 Adviser Business Model Report provides a detailed analysis of key trends and opportunities within the financial advice sector. Based on a quantitative online survey of financial advisers conducted by Investment Trends between May 2024 and June 2024. Total number of responses after data cleaning and validation: n=1,732 financial advisers.

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Peter Burgess

The more than 350 SMSF professionals who attended the two-day SMSF Association Technical Summit in Sydney this week went away armed with comprehensive strategies and enhanced industry knowledge to take back to their clients.

The Summit, which brought together recognised industry leaders to address delegates in keynote and technical sessions as well as practical workshops, again demonstrated why it is one of the premier technical events on the SMSF calendar.

SMSF Association CEO Peter Burgess said the strong numbers, in person and online, were a testimony to the importance SMSF specialists placed on maintaining the highest industry standards.

“Considering our superannuation sector is riddled with complex law, active regulators, shifting legislative changes and trustees with unmet advice needs, there is a tremendous opportunity for firms with specialised knowledge to make a difference – and this Summit is integral to this.

“It’s why all sessions and workshops were highly technical and targeted to engage SMSF specialists with a thirst to be the best. Attendees were highly engaged, with the many questions asked indicative that even the most experienced SMSF professionals had more to learn.

“Whether it was Professor Melinda Edwards, Managing Director at Ethics Advisory Services, addressing the future impact of AI in financial services or Shelley Banton, the Head of Education at ASF Audits, on the intricacies of accurately valuing SMSF assets, delegates accessed the best thinking on such issues in a thought-provoking way that can only add value to their businesses.”

Burgess said it was extremely heartening to hear Investment Trends Head of Research Irene Guiamatsia inform attendees how SMSF specialists – defined as a practice with more than 20 SMSF clients – had increased their profitability over the past year.

“Investment Trends’ research demonstrated that specialists had gained from increasing their initial upfront fees to clients and not using them as a loss leader to be recouped later.

“She said that on a net basis all SMSF advisers seemed to have seen more of a revenue increase than decrease, but it was much more positive for SMSF specialists.

“This evidence from a respected research house goes to the core of the Association’s argument that SMSF specialisation reaps commercial and professional benefits.”

Burgess said other sessions that captured the delegates’ attention were the workshop presented by Craig Day (Head of Technical Services, Colonial First State) and Linda Bruce (Senior Technical Manager, Colonial First State) who examined planning and managing personal injury, temporary or permanent, when the unexpected happened.

“Jemma Sanderson (Director, Cooper Partners Financial Services) focused on live cases to understand how best to manage the smooth wealth management and succession planning within blended families.”

The Summit concluded with Cooper Grace Ward partner and SMSF Association chair, Scott Hay-Bartlem, presenting a captivating session on what SMSF professionals should be doing during the death benefit planning stage to manage conflicts and ensure nominated beneficiaries receive their intended benefits in the most tax effective manner

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Irene Guiamatsia

A key challenge for financial advisers when servicing their self-managed super fund (SMSF) clients related to difficulties encountered with the ATO, Dr Irene Guiamatsia, Head of Research at the research and analytics house Investment Trends, told the SMSF Association Technical Summit in Sydney yesterday.

Dr Guiamatsia, who examined the evolving landscape of SMSF establishments, intentions and wind-ups from the perspectives of trustees, advisers and accountants in her session, said that ongoing changes to ATO processes were presenting challenges to trustees, and the professional advisers supporting them.

“Compliance with the ATO’s event-based reporting is emerging as a new challenge, cited as the No1 reason for windups and mentioned by a growing chorus of advisers and accountants as well.”

Dr Guiamatsia also proffered that the average adviser now manages more client money compared with a year ago, but that number must be seen in the context of a smaller number of SMSF specialists. [Investment Trends defines an SMSF specialist as an adviser with more than 20 SMSF clients and an SMSF generalist with one to 20 SMSF clients.]

“Our Investment Trends 2024 SMSF Adviser and Accountant Report showed a significant proportion of SMSF specialist advisers reported an increase in year-over-year revenue from SMSF clients.

“They have also raised their upfront fees slightly and have broadened their client mix through accelerated technological transformation. In addition, advising on property and longevity protection have become a bigger part of the SMSF advisory package.”

Regarding trustees, Dr Guiamatsia said they were increasingly influenced by internet research and word of mouth in the decision to set up their SMSF, especially seeking access to specific asset classes such as property.

“The 2024 Vanguard/Investment Trends SMSF Investor Report highlighted the use of investment advisers among SMSFs has declined to a record low, with pension strategies and estate planning being the top two areas where trustee advice needs are unmet.”

She added that administration and compliance however formed the largest cluster of difficulties faced by SMSFs, ahead of investment selection.

Dr Guiamatsia said that more than half of SMSF accountants had reported increased year-on-year revenue, with ‘best practice’ accountants consistently raising their fees over the past three years.

“Technological adoption and proactive engagement with the ATO are top priorities for SMSF accountants, with those classified as being ‘best practice’ spending more time on administration tasks, potentially indicating a sharper  focus on higher quality output.”

On the issue of cyber risk, she said nearly half of the ‘best-practice’ accountants planned to reduce the use of emails for sensitive information.

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Irene Guiamatsia

Leading financial services industry research firm Investment Trends has released the 17^th edition of its 2024 Adviser Product and Marketing Needs Report, highlighting key trends and opportunities within the financial advice landscape.

The report shows that the financial advice sector is stabilising, with adviser numbers holding steady and exit intentions declining, reflecting a positive market outlook. As of May 2024, there are approximately 15,516 financial advisers in Australia, with the proportion planning to exit the industry in the next two years down to 6% from 7% in 2023.

The data also indicates a notable trend: the rise of ‘insourcers’—advisers who view product selection as essential to their client value proposition. This group has grown significantly over the past year, with many managing larger funds under advice.

“The stabilisation in adviser numbers and the decline in exit intentions are very promising developments,” said Irene Guiamatsia, Head of Research at Investment Trends. “These trends should open up significant potential for advisers to enhance their service offering and drive growth in the financial services sector.”

The report highlights that more advisers are looking to stay the course with their general approach to investment selection, with 35% not intending to make changes in the next year, up from 26% in 2023. However, in a significant shift, they now give equal consideration to ETFs and active unlisted managed funds when constructing core portfolios.

“Advisers’ willingness to equally consider using a mix of passive and active investments highlights a significant strategic opportunity,” said Guiamatsia. “We have seen ETFs overtake active unlisted managed funds as the preferred investment product for core portfolio allocation, with managed accounts, index unlisted managed funds, and direct shares topping the list.”

The report also indicates an opportunity for superfunds to enhance adviser distribution by focusing on research ratings, digital tools, and client education for end-clients. The results reveal that nearly 70% of advisers recommend their main platform’s superfund offering to clients, underscoring the potential impact of focusing on these areas. Advisers also cite multiple factors when recommending superfunds to their clients: fees (73%), range of investment options (57%), good customer service/support (49%) and online access (42%).

“Advisers are increasingly demanding resources that simplify complex information and can be easily shared,” concluded Guiamatsia. “Superfunds that address these needs will be in the best position to strengthen their relationships with advisers, ultimately leading to increased loyalty and advocacy.”

About Investment Trends

Investment Trends is a specialist financial services market research organisation providing business insights and decision support information to many of the world’s leading financial services organisations. We combine analytical rigour and strategic thinking with the most advanced market research and statistical techniques to help our clients gain competitive advantage. As a company we aim to improve the lives of millions of investors by making the whole financial services industry better.

Our research coverage spans ten countries across Australia, Asia, Europe and the US. Our clients include industry regulators, leading local and global banks, investment platforms, leverage trading providers, fund managers, superannuation and pension funds, product issuers and manufacturers and financial advisory software providers.

Research Methodology:

The Investment Trends 2024 Adviser Product and Marketing Needs Report provides a detailed analysis of key trends and opportunities within the financial advice sector.

Based on a quantitative online survey of financial advisers conducted by Investment Trends between 02 May 2024 and 02 June 2024. Total number of responses after data cleaning and validation: n=1,732 financial advisers.

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Irene Guiamatsia

Delegates to the SMSF Association 2024 Technical Summit, being held on 24-25 July at Sydney’s Hyatt Regency, will get a rare insight into the Vanguard/Investment Trends 2024 SMSF Report that explores how the sector is evolving and its potential impact on their businesses and clients.

The session, titled The SMSF Advantage: Latest research and emerging trends, will be delivered by Investment Trends Head of Research Dr Irene Guiamatsia, a seasoned researcher with two decades of experience spanning academia, market research and financial regulation.

Guiamatsia’s session will deliver deep insights into the comprehensive research report and how it reveals the behaviours, preferences and needs of investors and the professionals that support them.

SMSF Association CEO Peter Burgess says: “This is a must-attend session to hear Irene unpack the latest Investment Trends research and to understand its potential effect on your clients and businesses.

“It will delve into the evolving landscape of SMSF establishments, intentions and wind-ups, offering a comprehensive analysis from the triangulated perspectives of trustees, advisers and accountants.

“The research reveals, for example, the changing motivations behind why SMSFs are being established, with family, friends and the internet increasingly displacing the traditional role accountants have played in advising individuals to go down this superannuation path.

“Irene will provide fresh thinking into this significant trend, exploring the challenges and opportunities it poses for accountants and advisers.

“She will also address the best practices and innovative strategies professionals employ to enhance client service and ensure compliance.”

Burgess adds that this session is the icing on the cake for the two-day Technical Summit that plays an invaluable role in bringing industry specialists together, to explore strategies, and share knowledge to ensure the SMSF sector is sustainable and upholds the highest professional and ethical standards.

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Irene Guiamatsia

Key points

• Ready health insurance market: This untapped market has an average age of 39 years, with 45% aged between 18-34, and an average income of $78,000.

• Onboarding opportunities: The overall application process is streamlined but consumers demand better information sharing and digital enhancements for improved ease and connectivity. 

• Claims efficiency: Online portals are the dominant method for processing claims with chat services offering the quickest resolutions but is underutilised (3%), highlighting opportunity to better promote.

Leading financial services research firm Investment Trends has published the 2024 Consumer Insurance Needs Report, focusing on health insurance. This comprehensive report provides key insights into the health insurance landscape in Australia, revealing significant trends, opportunities and consumer preferences.

The latest report shows that 2.6 million Australians currently without coverage are interested in obtaining it. This ready market, predominantly aged 18-34 with an average income of $78,000 represents a significant opportunity for insurers to expand their customer base. This group is found to have clear information needs when selecting their insurer with policy pros and cons (49%), discounts (48%), and the impact of government policies (41%) being the top consideration drivers.

“2.6 million Australians interested in obtaining private health cover, in addition to the 10.3 million that already do so, is a substantial opportunity,” said Irene Guiamatsia, Head of Research at Investment Trends. “Providers that can comprehensively address these information needs are well positioned to seize it.”

The report also highlights that, in the whole, consumers find the process of applying for health insurance to be reasonably streamlined. Tracking the application status (51% ease) and filling out application forms (44% ease) are relatively straightforward, however the provision of supporting documentation (only 5% ease) appears to be a significant pain point.

Health insurance makes up the largest volume of claims (84%) made by consumers last year. The majority of these claims are made through their insurer’s online portal (56%) or on premises at the medical facility or clinic providing treatment (34%). Claims made through the online chat service (only 3%) have the quickest outcomes, but the channel is severely underutilised, highlighting an opportunity to better promote.

“The experience of health insurance policyholders illustrates a strong correlation between speed of claims processing and client satisfaction. While health insurance users are more satisfied in all areas compared to GI or Life insurance users, they still want more – improved information sharing, more digital interaction, additional benefits, and a broader care provider network. Prioritising these enhancements is crucial to retaining existing clients and securing the next wave of health insurance policy holders,” concluded Guiamatsia.

Research Methodology

The Investment Trends 2024 Consumer Insurance – Health Insurance Report provides a detailed analysis of the Consumer General Insurance industry, examining the sentiment, attitudes and needs of Australian consumers. Based on a quantitative online survey of Australian consumers conducted by Investment Trends from December 2023 to January 2024. Total number of responses after data cleaning and validation: n=5,385. 

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Irene Guiamatsia

Key points

• 45% of Australian consumers say general and health insurance are both more important now than before the pandemic.
• Reputable brands (42%) and low premiums (37%) are rated as the top selection criteria when choosing a general insurance provider.
• Insurers must innovate to retain and attract new customers, with 80% of policyholders open to switching their general insurance provider in the future.

The recent Investment Trends 2024 Consumer Insurance Needs Report – General Insurance highlights significant changes in Australian consumer attitudes, and preferences towards general insurance coverage.

The report shows that 45% of Australian consumers now consider general insurance more important than before than pandemic, resulting in a re-evaluation of general insurance needs. This has been driven by increased awareness of risks and uncertainties such as property damage (35%), financial loss (28%), and personal safety (22%).

“Disasters such as the Black Summer bushfires, floods in NSW and QLD, and more recently the devasting floods in Germany and the extreme heat waves in the Philippines, have heightened the demand for general insurance cover,” said Irene Guiamatsia, Head of Research at Investment Trends. “Australians are not just looking for basic coverage; they want policies that offer better value and more comprehensive protection to safeguard their assets and livelihoods”.

The findings reveal that when selecting a general insurance provider, Australians prioritise reputable brands (42%), low premiums (37%), and existing relationships (21%). Additionally, consumers were found to value an insurer’s ability to provide a seamless online experience and efficient claims processing. Transparency, customer service, and digital engagement were also seen as essential in meeting evolving expectations.

The results indicate a significant shift in customer behaviour with 80% of general insurance policyholders indicating they are open to switching general insurance providers in the future. For that group, premiums and rewards rank far higher on the wishlist than brand does.

“In the highly contested market of general insurance, providers cannot rely on brand alone and need to carefully build value propositions that most comprehensively address the needs of the specific client groups they wish to service,” concluded Guiamatsia.

As consumer behaviour continues to evolve, driven by both global events and local realities, the insurance industry must respond with innovative, customer-centric strategies.

The findings from the Investment Trends 2024 Consumer Insurance Needs Report – General Insurance explores in forensic detail the needs and experiences of current and prospective general insurance users, across various demographic and psychographic characteristics including but not limited to: age, wealth bracket, household income, household type, multicultural background and adviser usage.

Research Methodology:

The Investment Trends 2024 Consumer Insurance – General Report provides a detailed analysis of the Consumer General Insurance industry, examining the sentiment, attitudes and needs of Australian consumers. Based on a quantitative online survey of Australian consumers conducted by Investment Trends from December 2023 to January 2024. Total number of responses after data cleaning and validation: n=5,385.

About Investment Trends:

Investment Trends is the leading researcher in the retail online share dealing and leveraged trading markets globally. We combine our analytical rigour and strategic thinking with the most advanced research and statistical techniques to help our clients gain competitive advantage. We have over 10 years’ experience in researching the retail wealth management and global broking markets from which we provide new insights and decision-making support to over 200 leading financial service businesses globally. Investment Trends’ clients include several global banking organisations, all major online brokers and CFD providers as well as industry regulators, advice providers, fund managers, super funds, investment platform providers, and industry associations.

The post Rising climate and health risks spurs surge in Australian consumers’ appetite for insurance cover appeared first on AdviserVoice.

Irene Guiamatsia

Key points

• 45% of Australian consumers say general and health insurance are both more important now than before the pandemic.
• Reputable brands (42%) and low premiums (37%) are rated as the top selection criteria when choosing a general insurance provider.
• Insurers must innovate to retain and attract new customers, with 80% of policyholders open to switching their general insurance provider in the future.

The recent Investment Trends 2024 Consumer Insurance Needs Report – General Insurance highlights significant changes in Australian consumer attitudes, and preferences towards general insurance coverage.

The report shows that 45% of Australian consumers now consider general insurance more important than before than pandemic, resulting in a re-evaluation of general insurance needs. This has been driven by increased awareness of risks and uncertainties such as property damage (35%), financial loss (28%), and personal safety (22%).

“Disasters such as the Black Summer bushfires, floods in NSW and QLD, and more recently the devasting floods in Germany and the extreme heat waves in the Philippines, have heightened the demand for general insurance cover,” said Irene Guiamatsia, Head of Research at Investment Trends. “Australians are not just looking for basic coverage; they want policies that offer better value and more comprehensive protection to safeguard their assets and livelihoods”.

The findings reveal that when selecting a general insurance provider, Australians prioritise reputable brands (42%), low premiums (37%), and existing relationships (21%). Additionally, consumers were found to value an insurer’s ability to provide a seamless online experience and efficient claims processing. Transparency, customer service, and digital engagement were also seen as essential in meeting evolving expectations.

The results indicate a significant shift in customer behaviour with 80% of general insurance policyholders indicating they are open to switching general insurance providers in the future. For that group, premiums and rewards rank far higher on the wishlist than brand does.

“In the highly contested market of general insurance, providers cannot rely on brand alone and need to carefully build value propositions that most comprehensively address the needs of the specific client groups they wish to service,” concluded Guiamatsia.

As consumer behaviour continues to evolve, driven by both global events and local realities, the insurance industry must respond with innovative, customer-centric strategies.

The findings from the Investment Trends 2024 Consumer Insurance Needs Report – General Insurance explores in forensic detail the needs and experiences of current and prospective general insurance users, across various demographic and psychographic characteristics including but not limited to: age, wealth bracket, household income, household type, multicultural background and adviser usage.

Research Methodology:

The Investment Trends 2024 Consumer Insurance – General Report provides a detailed analysis of the Consumer General Insurance industry, examining the sentiment, attitudes and needs of Australian consumers. Based on a quantitative online survey of Australian consumers conducted by Investment Trends from December 2023 to January 2024. Total number of responses after data cleaning and validation: n=5,385.

About Investment Trends:

Investment Trends is the leading researcher in the retail online share dealing and leveraged trading markets globally. We combine our analytical rigour and strategic thinking with the most advanced research and statistical techniques to help our clients gain competitive advantage. We have over 10 years’ experience in researching the retail wealth management and global broking markets from which we provide new insights and decision-making support to over 200 leading financial service businesses globally. Investment Trends’ clients include several global banking organisations, all major online brokers and CFD providers as well as industry regulators, advice providers, fund managers, super funds, investment platform providers, and industry associations.

The post Rising climate and health risks spurs surge in Australian consumers’ appetite for insurance cover appeared first on AdviserVoice.