Swiss Re has carried out a study on the preferences of younger Australians towards life insurance, underscoring a pronounced demand for life insurance, with 7 out of 10 of respondents either covered or planning to secure coverage-comprising 25% already insured and 45% intending to get insured.
Notably, 69% possess life insurance through their superannuation, often by default, highlighting a potential area for personalized policy enhancement. Interestingly, immigrants were found to be 10% more likely to have life insurance than respondents born in Australia, typically through private policies.
The aanalysis provides insights into the attitudes and behavior of Australian Millennials and Generation Z towards life insurance. This comprehensive study quantifies the preferences, barriers to entry, digital engagement habits, and social influences that these younger cohorts exhibit towards life insurance.
Study scope and participant demographics
Focusing on Australians aged 18 to 41, the study meticulously surveyed a diverse group that included both persons born in Australia and immigrants from Europe, Asia, and the Americas. Through a combination of qualitative interviews with 10 participants and a quantitative survey of 1,000 individuals, the research offered a balanced view across gender, with incomes spanning up to A$150,000 ($98,000). A significant 81% of these respondents were employed, providing a robust framework for the study’s insights.
Family and property
The survey revealed that around 6 out of 10 respondents were in committed relationships (25% married and 34% in a relationship), showing a strong orientation towards stable familial structures. Additionally, a forward-looking two-thirds either already have children or plan to, broken down into 10% with one child, 12% with two or more, and a future-focused 44% planning for children. Property ownership is a major goal, with more than 9 out of 10 people having or intending to buy property – 32% own one property, 5% own two or more, and a prospective 55% aim to purchase in the future.
Barriers to coverage
While 41% of those insured feel their coverage is adequate, 37% express a desire to increase their insurance due to family growth. However, a concerning 10% is an element about the adequacy of their coverage. The reluctance to purchase insurance is primarily attributed to perceived youth (37%) and affordability concerns (34%). For those canceling their insurance, high costs (42%), increased living expenses (21%), and a lack of perceived need (18%) were the main reasons.
Digital preferences and consumer behavior
More than half of the surveyed group prefers online transactions for insurance purchases, with 19% favoring purchases through superannuation and 17% seeking a mix of independent research and professional advice. The top priorities for choosing an insurer were competitive pricing, clear policy details, and brand reputation. There’s a notable demand for responsive customer service and 24/7 self-service capabilities, with 9 out of 10 people interested in health and wellness programs that offer incentives for maintaining a healthy lifestyle.
Social media’s sphere of influence
Social media plays a pivotal role in financial decision-making, with 96% of participants using these platforms for personal connections and staying updated with news. A regular engagement rate (often daily) for 7 out of 10 people across platforms like YouTube, Reddit, and Instagram indicates a high consumption of financial advice and news, suggesting a strategic avenue for insurers to engage with this demographic.
Implications for the insurance industry
The study underscores the imperative for the industry to evolve with these changing demands. The adaptation to digital-first and customizable insurance products resonates well with millennials and Gen Z in Australia, who value tailored and flexible solutions that align with their lifestyle and needs.
This approach opens growth opportunities, not only by catering to the unique preferences of these younger demographics but also by addressing the needs of immigrants and forming strategic partnerships with superannuation funds. Recognizing the importance of effective communication and offering entry-level products is crucial in this context.
Furthermore, the shift towards consumer-centric models underscores the necessity of digital innovation in offering more personalized and engaging customer experiences. By utilizing new data sources, insurers can improve accessibility and innovate product offerings that meet the nuanced needs of today’s consumers.