Life Insurance in Australia – Consumer Behaviour Transformation
For the second year running, NobleOak has released a White Paper titled “Life Insurance in Australia – Consumer Behaviour Transformation” bringing together independently commissioned research to identify consumer trends and behaviour with respect to Life Insurance.
Surveying over 1,000 Australians – including a mix of those who have Life Insurance and those who don’t – our findings show an industry that continues to be reshaped by digital disruption. This is in addition to the fundamental regulatory and structural changes it is facing. Underinsurance also remains a significant problem with many Australian families vulnerable should an unfortunate event take place. What is becoming clear is that Australian consumers, empowered with more choice and ability to access information, are taking control of their Life Insurance decisions directly.
Life Insurance advice is predominantly sourced from the internet
The internet has become the predominant source of Life Insurance advice by Australians, with a heavy reliance on family and friends, and advisers still playing a role for many. 43.6% of respondents use the internet when seeking financial advice for Life Insurance.
Diagram: Where do you obtain advice with respect to your Life Insurance?
More Online Tools are needed
Greater access to online information and calculators has led to a more empowered consumer. This is challenging people’s willingness to pay for financial advice. 57% of respondents would use an online assessment tool to help purchase Life Insurance.
Chart: If you had a choice between using a financial adviser to buy Life Insurance or using an online assessment calculator which would you choose?
Price is the key decision driver
The increasing discerning Australian consumer requires excellent value for money – the best price as well as the right features and claims reputation. Cost of premiums was cited by 80.5% of respondents as one of the most important factors when purchasing Life Insurance.
Chart: What things are or would be most important to you when purchasing Life Insurance?
Certainty at claim time is more important than speed
The benefits of underwriting a policy upfront is valued by consumers, with a majority preferring to conduct a full health assessment than answer a few questions when applying for cover. 39% of people think it’s better to do a full health assessment, compared to 30% who say it’s better to only answer a few questions.
Chart: When buying Life Insurance do you think it’s better at the time you apply to: