Insurers could become increasingly attractive to younger customers by offering a wider range of payment options, especially amid the ongoing cost-of-living crisis.

GlobalData’s 2022 UK Insurance Consumer Survey found that 18–30-year-olds were much more open to paying for insurance in more modern ways compared to all respondents. Continuing with traditional payment methods was preferred by 73.3% of total respondents, but that was 22.7pp lower for 18–30-year-olds. This age group are much more open to PayPal (+7.7pp above the total average), mobile wallets (+7.6pp), buy now pay later (+5.3pp), and even cryptocurrencies (+2.2pp).

Some of these options are likely to be focused on convenience, with mobile wallets and PayPal allowing for instant digital payments (while PayPal can also offer extra security). Meanwhile, buy now pay later offers consumers the opportunity to spread payments over a longer period of time. Insurance policies are still mainly paid for annually, despite some insurtechs and insurers offering monthly subscriptions. Only 25.0% of UK consumers paid monthly motor premiums directly to their insurer in 2022 according to GlobalData’s survey. Insurers could interpret interest in buy now pay later as a sign younger consumers would be interested in monthly billing instead of large one-off payments, which could be an effective way to help struggling individuals manage their finances.

Overall, this indicates that insurers could look to offer flexibility in payment methods to attract younger customers. Financial Conduct Authority pricing reforms introduced in January 2022 have made it harder for insurers to offer new consumers cheaper policies. Meanwhile, GlobalData findings highlight that more consumers are looking for new policies at renewal across all personal lines (largely due to the cost of living) but are ultimately staying with the same insurer, as they are not finding better deals. Therefore, offering greater flexibility in payments could help insurers stand out in a market where doing so has become increasingly difficult.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.