Let’s talk about risk (and insurance!)

Are we witnessing a change in insurance needs due to COVID?

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  • Paul Stamper Client Organisation
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In the last year my car has barely been out of the garage for weeks at a time.  I’ve not left the UK since spring 2020.  With working from home, our house has been occupied pretty much 24/7.  I’ve not acquired a dog this year but, walking in our local park, it feels like I’m about the only person who hasn’t.  Why am I telling you all this?  All four of these – cars, homes, travel, pets – are things that we insure.  If our relationship with the things we insure has changed over the past 15 months, does that mean our relationship with insurance has changed?

There’s no doubt that we have become far more aware of the risks that exist in so many aspects of our lives.  The latest data from the Ipsos’ Essentials tracker shows that a quarter of us see high risk to our health and well-being in things like going to the hair-dresser, dining in a restaurant or gathering in-person with friends and family.  Similarly, more than half of us agree that thinking about resuming normal activities after the pandemic makes us feel very anxious.  With this data in mind, we might expect people to be very focussed on the mitigation of risk and the role of insurance.

To put this to the test, we asked our Money Talks qualitative community about their views of general insurance.  Those who know that customer engagement with general insurance is very low, won’t be surprised to find that many people haven’t given it much thought.  However, amongst those who have thought about it, there are some common themes. 

Lots of people will be scrutinising their travel policies more closely, to see whether global pandemics are covered, alongside lost luggage and cancelled flights: 

In the past, I would always check that lost luggage, flight cancellations or illness meaning it wasn't possible to travel were covered. But never anything related to a global pandemic before!

(Female, 55-64, London)

Others will be looking to their motor insurance providers to reflect the lower mileage and less frequent car use they are anticipating:

I've travelled a lot less. Which, combined with starting to cycle to work, has meant that I don't use the car, often for weeks at a time. This has meant that my car insurance has come down due to the lower mileage.

(Female, 35-44, North West)

Those who will be continuing to work from home will be looking for cover which matches their changed needs: 

I need my insurance to cover the same things that it always has, although I might want to be sure that it covers me for working at home more, including any equipment I might have at home for work.

(Male, 55-64, East Midlands)

So, no fundamental re-evaluations of insurance needs.  No demands for radical new product formats, coverage options or new classes of insurance.  But there is an opportunity. 

Consumers are more sensitive to risk and making further re-adjustments with the ending of lock-down restrictions.  Brands with their fingers on the pulse have the chance to open up conversations.  Showing that your products are adapting to changing needs and that you’re keen to offer appropriate value to your customers is always a good strategy (especially given the recent FCA ruling on loyalty penalties).  Today your customers will be more open to engage with this message.  They may even be grateful for a conversation about their insurance! 

  • Contact Paul below to see how the Financial Research Survey (FRS) can definitively measure the areas of financial services that matter to your organisation.

The author(s)

  • Paul Stamper Client Organisation

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