Asia-Pacific consumers increasingly price sensitive towards insurance: survey

CONSUMERS in the Asia-Pacific have become more price sensitive towards insurance purchases amid concerns over their financial stability post-Covid.

A recent survey by Swiss Re founded that 80 per cent of respondents cited price as the most important decision factor in purchasing an insurance policy, up 5 per cent from 2020.

More than a quarter remain concerned about how they will recover financially from the pandemic, which comes even on the back of the global vaccine roll-out and the gradual reopening of economies.

With price being a key and growing influence on insurance buying behaviour, questions loom over whether insurers will be spurred to trim coverage, especially for healthcare plans.

Russell Higginbotham, chief executive officer reinsurance Asia at Swiss Re, told The Business Times that consumers now have a heightened awareness of the different levels of cover offered in policies and a better ability to make comparisons.

As it is, Covid-19 has exposed shortfalls in consumers' insurance protection, where increasing health concerns have translated into strong health insurance premium growth in several markets such as Thailand, Singapore and China, he said.

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In 2020, for example, health insurance premium maintained its 10.5 per cent growth in the Asia-Pacific, compared to during the global financial crisis in 2008 when premium growth slowed sharply.

"Customers will be more discerning about their purchasing choices. They are looking for better service, easier access and potentially more of a personalised relationship with insurers," said Mr Higginbotham.

According to the survey, 33 per cent of consumers rated breadth of cover as the most important insurance element, particularly to buyers in mainland China, Hong Kong and Malaysia.

In a time of social restrictions, digital insurance purchases are also expected to continue to rise in the region.

Over the past six months, 39 per cent of total transactions were completed online. About half of those surveyed said they are interested in purchasing through an insurer's website or app in the future.

While many are keen to return to some semblance of normal social life, about a third of respondents are still keen to maintain social distancing and avoid large gatherings such as concerts and festivals.

This speaks to the need for the insurance industry to continue to apply digitalisation throughout the insurance value chain, said Mr Higginbotham.

That said, he observed that most buyers still value personal advice and interaction, particularly around complex purchases. "We see more of a blend of personal and digital interaction, with the customer being able to make flexible choices around this."

As social behaviours evolve, there are opportunities for insurers to tailor new and more flexible solutions to meet evolving consumer needs, such as offering protection for consumers' increasing online transactions.

Heightened risk concerns around mental well-being and growing interest in non-traditional distribution channels have also given rise to more innovative product offerings across the region.

"The re/insurance industry is in a unique position to extend its offerings and help individuals and families to strengthen their resilience now, to ensure they are prepared for the future," said Swiss Re.

The firm's recent survey covered 7,000 consumers across 12 markets in the Asia-Pacific.