Nearly 70% of Canadians say they have never been solicited by an insurance broker or agent. Yet many are familiar with insurance products and believe they are important.
This finding comes from an Ipsos survey done in March 2016 for Munich Re Canada. Cedric Thibault, director, Business Development, Individual Reinsurance, unveiled the results at the Insurance and Investment Convention in November. The survey took the pulse of a sample of Canadians to gauge whether they think insurance is important.
Ipsos asked the people surveyed how well they know the insurance products offered in Canada. For life insurance, 73% of men and 66% of women said they were familiar with this product. For critical illness insurance, the figures plunged to 43% for men and 33% for women.
How important is it to hold the following types of insurance coverage? In all product categories, more women than men believe that insurance is important. However, they differ by only a few percentage points. “Women place more importance on insurance, which should encourage the industry to adapt its sales process,” Thibault says.
Regarding critical illness insurance, 57% of men and 59% of women think this product is important. CI is not widespread yet, Thibault points out, but it is growing by 10% to 15% per year, and this will continue if the industry strives to explain the product and make it more accessible.
Are insurance products considered indispensable, desirable or useless? While 49% of respondents consider life insurance indispensable, this proportion rises to 60% for those ages 18-24, and to 56% for the 25-35 age group, but only 46% for those ages 55 and older.
The same trend can be seen in short-term or long-term disability, long-term care insurance, group life and critical illness. In contrast, older respondents consistently view home and travel insurance coverage as more important than their younger counterparts do.
Critical illness insurance is also viewed by younger people as more important, but fewer people find this product indispensable (18% overall, 29% of those ages 18-24, and 25% in the 25-35 group).
Asked whether life insurance is a valid investment, 45% of the respondents from Saskatchewan and Manitoba said yes – the highest score in the country. British Columbia ranks last, at 29%.
The survey firm then listed 15 factors that may influence life insurance purchases, and asked the respondents to rank them in order of importance. It tabulated the results by compiling the factors cited first, second or third. The whole sales process was analyzed in this way.
At 49%, the premium amount is one of the three most important factors in insurance purchases, which is not surprising, Thibault says. “In fact, this also means that for 51% of respondents, the premium is not among the three key factors when buying insurance,” he points out.
The stability of premiums guaranteed for life (34%) is the second factor cited most often in the top three. Thibault notes that this view is specific to the North American market, because guaranteed premiums are less common in other countries.
Other preferred factors are coverage details (31%), the insurance company’s reputation (29%), that coverage be for life (23%), relationship with the agent or broker (20%), advice from the financial planner (18%) and getting practical coverage quickly (18%).
When he takes the quick policy issue process together with the other factor concerning the lack of risk selection or medical exam (13%), which is ranked only 12th, Thibault concludes that the clientele “does not seem overly concerned with waiting time.”
Sources of information
Do consumers prefer to obtain all of their insurance products from the same company, or to shop around and use the services of several insurers? Two-thirds of respondents prefer to use the services of one insurer for all their products. Regarding consumption of insurance products, women value loyalty to a single supplier (70%) more highly than men do (62%).
In addition, 30% of respondents say they have already been solicited by an agent or broker. When the results are compared by age bracket, the proportion drops to 25% for those aged 25 to 35. “We saw earlier that customers in this age bracket place above average importance on insurance, and it’s this category that seems to be solicited the least,” Thibault underlines.
The survey firm also asked about the sources of information used for different types of insurance. Respondents could check more than one source. For life insurance, nearly half of respondents, or 48%, said that an agent or broker in person is a good source of information. “If we combine this with a broker or agent on the telephone, at 19%, this means that over 60% of people consider advisors to be their main source of information for life insurance,” Thibault explains.
About 33% of respondents said that they search for information online from their computer, while 7% surf the net via their cell phones. Younger respondents are more likely to search for information on life insurance online, for all media combined: 61% among ages 18-24, and 48% among ages 25-35.
If we add to this result the people who get information from their friends or family, at 21% for all respondents, the influence of social media should not be underestimated, Thibault says. “An online and social media presence is crucial for the next generation of consumers. It’s a way to reach and inform the clientele. The industry must be more aware of the need to be more present on these platforms.