Two new pieces of research released this week provide interesting insights into how consumers make decisions on their insurance needs, including the differences between the sexes.
Specialist life insurer, TAL, said its latest round of consumer research found that men are more likely to hold life insurance than women. 41% of men surveyed said they had some form of life cover (ie: disability, income protection, trauma and end-of life insurance), compared to just 33% of women.
However, when it came to making the decision to hold other kinds of insurance, such as car, home and health insurance, women were more likely to hold cover than men.
According to TAL Group CEO and Managing Director, Jim Minto, these results reflect the long term trend for primary earners to have more life cover than secondary earners and stay at home carers.
“Life cover has long been considered the domain of the primary earner, and historically this has been men, but the need for life cover for secondary income earners and stay at home carers is just as high as for the primary earner,” Mr Minto said.
The challenge for the industry is to change people’s mindset so that they better understand the importance of these products
“While the gender pay gap remains an issue despite recent improvements, so too the disparity between the sexes in terms of life cover continues. This is despite a gradual bridging of the life cover gap being aided by greater accessibility through more direct channels, a greater number of female advisers and default cover through superannuation.”
The survey also found that life insurance is still less of a priority than home and car insurance. While 75% of all those surveyed had comprehensive car insurance, and over half had health insurance (56%), just 37% said they held some form of life insurance.
“People need to understand that life insurance not only protects the value they have created in their lives already, but protects the future they imagine and aspire to. It protects one’s way of life,” said Mr Minto.
“The challenge for the industry is to change people’s mindset so that they better understand the importance of these products and view them as being as essential as home or car. The Government has made life and disability insurance mandatory through its MySuper reforms to help reduce the huge underinsurance gap in Australia, but more needs to be done to incentivise people to have adequate financial protection.”
Meanwhile, business owners are relying on their peers for advice on insurance, according to a study by Aon.
… more than two-thirds (71%) of businesses rate their insurance needs as complex
The survey of 100 businesses with a turnover between $15 – 100 million showed some ‘concerning deficiencies’ in the way businesses seek information about their insurance needs, Aon said. Recommendations from colleagues ranked highest at 50%, compared with sounder forms of information, such as from industry associations and broker recommendation, at 34% and 33% respectively.
“This is a worry given that more than two-thirds (71%) of businesses rate their insurance needs as complex,” said Andrew Gordon, Head of Marketing at Aon Risk Solutions. “It’s frankly unlikely that consulting with colleagues is going to provide the information a business needs to get the right type and level of insurance.”
The study was aimed at improving relationships between brokers and their clients, but has implications for the financial advice industry.
“Many businesses report frustration with a number of elements of their broker relationship, including infrequent transactional style contact, when a full and frank exchange of relevant information between broker and business is required,” Mr Gordon said.
