Insurance Customers Want Convenience and Climate Action, but It Must Be Built on Trust
December 13 2022 - 3:00AM
Business Wire
Data-driven future of insurance will only
become reality if insurers can convince customers on data
collection benefits
Consumers are beginning to look for the same convenience from
their insurance companies as they are in other areas of their
lives. That is according to a report* published by Guidewire (NYSE:
GWRE) which has also found that insurance customers are open to new
services that mitigate risks and believe that insurers should be
tackling climate change proactively.
Insurance customers are starting to think about how their
insurance policy fits with their lifestyle. Whilst only 12 percent
of those surveyed had a Usage-Based Insurance (UBI) policy, 54
percent of people could see the value of one. Of those that did
have a UBI policy, the fact that the policy fitted with their
lifestyle was the main reason (37%) they had chosen it.
When it comes to proactive services that mitigate risks, such as
leak detection, more than six out of ten (61 percent) people
surveyed, said that they would want access to such a service if
their insurer offered it. In terms of other types of risks that
might be mitigated, having access to real time data about plumbing
to detect leaks (21 percent), driving (20 percent), and home
heating systems (19 percent), rose to the top. Customers would feel
most comfortable sharing their data with their insurer regarding
these risks.
Notwithstanding this, the issue of data collection will be a
tricky one for the insurance industry to manage with the growth of
more proactive services and UBI. On this point, insurance customers
in the UK are far more conservative than their counterparts
elsewhere in Europe. Less than a quarter (24%) of those surveyed
believe that insurers collecting more data will be a good thing
that improves services and reduces prices, with 28 percent unable
to understand why insurers feel that they need this level of data
on their customers; regarding this as an invasion of privacy. Over
a third (36%) can see why insurers might want to collect the data
but would rather they not do so. Insurers need to earn the trust of
consumers on the fence about data collection if they are to be
successful. Whilst many (44%) believe UBI represents too big a loss
of privacy for them, 46 percent neither agree nor disagree as to
whether it does.
René Schoenauer, Director, Product Marketing - EMEA, Guidewire,
said, “Consumers are far better educated now on their privacy and
how data about them is being collected, which means that insurers
need to build trust fast if they want to maintain and grow their
business. Insurers are looking at new services or tighter
segmentation to improve profits, but without the permission to
collect the data needed to underpin these services they will not be
truly successful. Helping customers understand how collecting and
using their data will help them and educating them on the benefits,
such as personalisation, is as important an investment as
developing advanced AI models or IoT solutions. You cannot have one
without the other.”
Insurance customers expect insurers to play their part on
climate
Insurance customers are also beginning to think that insurers
should be acting on climate change, but consumers in the UK are
less willing to assume increased costs as opposed to their
counterparts in other European countries:
- UK insurance customers are most likely to believe that insurers
should invest more of their profits into supporting environmental
projects and sustainable start-ups (33 percent).
- This is also the most popular option in Spain (37 percent),
whereas in Germany insurance customers are most likely to think
that insurers should use their position in global markets to
influence the actions of polluting companies but not disassociate
from them (31%).
- In France, focusing on repairing damaged goods instead of
replacing them is thought to be the best course of action
(33%).
- UK consumers are at least twice as likely to think that
combatting climate change is not the responsibility of insurers,
with 30 percent of UK respondents holding this view compared to the
next highest, France, at 15 percent, with Germany (14 percent) and
Spain (13 percent) lower still.
- In the UK, this translates to a lower willingness to assume
increased costs themselves.
- France (44 percent), Spain (44 percent) and Germany (53
percent), are far more likely to buy an eco-insurance policy –
whereby the policy is more expensive, and the extra money is used
to offset carbon emissions incurred during the insured
activity.
- This falls to 31 percent amongst insurance customers in the
UK.
“With severe weather events across Europe and the world in the
past twelve months, insurers clearly need to play a role in
combatting climate change. Whatever course of action insurers take,
they should be clear and transparent about it and show the
difference they are making. In this way they can demonstrate the
positive role insurance companies play in our lives, something that
all too often goes largely unnoticed”, added Schoenauer.
*Guidewire commissioned market research agency Censuswide to
survey a representative sample of 1,000 insurance customers aged 18
to 55+ years old about their insurance preferences. The survey took
place in May 2022. The aim of the survey was to provide the latest
insights into how UK general insurance customers view insurers,
their products, and services. Guidewire commissioned simultaneous,
parallel reports, in the UK, France, Germany and Spain.
About Guidewire
Guidewire is the platform general insurers trust to engage,
innovate, and grow efficiently. We combine digital, core,
analytics, and AI to deliver our platform as a cloud service. More
than 500 insurers in 38 countries, from new ventures to the largest
and most complex in the world, run on Guidewire.
As a partner to our customers, we continually evolve to enable
their success. We are proud of our unparalleled implementation
track record, with 1,000+ successful projects, supported by the
largest R&D team and partner ecosystem in the industry. Our
marketplace provides hundreds of applications that accelerate
integration, localization, and innovation.
For more information, please visit www.guidewire.com and follow
us on Twitter and LinkedIn
NOTE: For information about Guidewire’s
trademarks, visit https://www.guidewire.com/legal-notices.
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version on businesswire.com: https://www.businesswire.com/news/home/20221213005197/en/
Daniel Couzens Allison + Partners +44(0)203 971 4308
guidewire@allisonpr.com
Louise Bradley Senior Manager, Media & Analyst Relations -
EMEA Guidewire Software +44 (0)7474 837 860
lbradley@guidewire.com
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