Swiss Re’s European Insurance Report 2012 has
revealed that the internet is the most trusted source of advice for
life and protection insurance with approximately 25% of respondents
citing this channel, compared to about 10% choosing financial
advisers or brokers. 

The report includes the results of a survey
commissioned by Swiss Re among 15,000 consumers in 14 European
countries.

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An insurance company and friends and family
ranked second and third respectively in terms of the most trusted
sources concerning life and protection insurance.  Banks are
ranked fifth and this relative lack of trust is likely to be a
consequence of the financial crisis, noted the report.

Age does play a key role, when it comes to
trusted sources of advice for life and protection insurance with
ages 21–29 more likely to seek assistance from friends and family,
whilst those in age group 56–70 are more likely to discuss with a
financial advisor, said the report.  All ages would trust the
internet however.

The importance of the internet as a
distribution channel is emphasised by the report stating that most
consumers would be very or fairly comfortable taking out cover
through comparison websites on the internet or through their
employer.

Although social media and apps scored
relatively poorly with 12%, the study said the youngest age group
21–29 would be relatively more comfortable to make a purchase
through these channels, scoring 17% & 16% respec­tively. Those
in the highest age band 56–70 were least comfortable with 5% and
8%.

Other key findings in the report include:

  • The main reason for the insufficient market
    penetration of life insurance is that many consumers cannot afford
    it

 

  • As expense is a major barrier, the report highlights that for
    countries in the Eurozone, where level term life insurance is a
    relatively well-known product, consumers are willing to pay between
    €22 and 30 a month for life insurance cover of €100,000

 

  • There are two main items for insurers to consider regarding
    complexity.  The first is the formulation of insurance terms
    and conditions and product details, the second one concerns the
    actual application process

 

  • Both aspects provide a touch point at which consumers can
    withdraw from a potential sale

 

  • Simple and transparent products and a smooth buying process are
    essential for successful distribution

Bruce Hodkinson, Head of Swiss Re’s life and health continental
Europe business said: “We need to educate consumers in the area of
life insurance and make sure that they know where changes in the
welfare system could impact their own circumstances. This will
ensure that they have the necessary information to seek
complementary solutions.”