Swiss insurance Consumer Survey 2024
Buying habits in insurance
The Swiss insurance sector continues to evolve, reacting to broader economic trends and technological advances. This article aims to review how macroeconomic shifts and emerging technology trends are impacting consumer expectations following our initial publication in 2021.
Deloitte surveyed 1,000 Swiss insurance customers to examine shifts in how they research, buy, and renew insurance products. The aim is to understand changes in service expectations and use of sales channels compared to the 2021 Swiss Insurance Consumer Report.
Overall, the survey has pointed towards diverging expectations among different demographic groups, requiring insurers to apply a higher degree of customer segmentation and subsequent tailoring of communication. Customers are increasingly leveraging multiple sales and communication channels as hybrid digital and in-person interactions become the default expectation. Consumers desire simple yet effective digital self-services, readily available access to policy information, and knowledgeable agents. Price sensitivity has also increased since our last survey.
Insurers are likely to see a spike in customer churn rates, driven by premium increases. Communicating with customers the right way can mitigate the loss
At the time of survey, only 19% of customers accept policy renewal without reassessing the market. 57% of customers research and compare alternative providers due to changes in either price or coverage, while a further 17% are triggered by changes to their life conditions.
The cost of living in Switzerland rose by 5.56% between 2021-2023, leading households to reconsider their insurance expenses . 44% of the survey participants have recently reduced their insurance spending or are planning to do so. For more than half of them, this is triggered specifically by inflation, which strongly suggests that insurance is not always seen as the most essential service. Price-sensitivity is highest among younger and more affluent customers.
The majority of respondents are open to alternative solutions to maintain the original price, such as adapting the coverage, deductible or damage sum. Personal advice through an agent is the preferred method of finding such solutions.
When deciding which policies to amend, the majority of our survey respondents are looking to reduce either policies that cover lower risks (34%) or those that they deem the most expensive (32%).
What insurers can do
It is a common market practice to present a new policy and premium at the point of renewal. Insurers should actively explain why a price increase is fair to avoid any negative perception. Ideally, this explanation should be given through the customer's preferred communication channel, with clear next steps provided to find individual solutions that optimise retention.
Building trust and loyalty through personalised advice and guidance on individual risks and coverage helps customers understand the value of their policies.
Customers are unforgiving when basic digital services are lacking - but honor simplicity, reliability and speed with long-term loyalty
Although 35% of respondents would switch to a new provider if the price is cheaper for the same coverage, 44% would stay with their current provider due to service quality, while 23% are convinced to stay by a good counteroffer.
When ranking the digital capabilities of insurers, respondents across age groups identified claims handling and digital customer portals as the two most important, followed by online premium calculators. Novel technologies that do little to simplify the service, such as chatbots or new payment methods, were ranked the least important.
58% of respondents primarily value services that enable them to spend as little time as possible dealing with their insurer, whilst younger respondents are more likely to choose services that allow them to interact with their provider entirely through digital channels, including digitally supported personal advice. Having the most technologically advanced features is the least likely to impact customer satisfaction, even among younger respondents.
Alternative ways of personalising the insurance premium through tracking personal behaviour data can be of interest to a subset of consumers. Younger respondents are generally more open to share personal data, but the more sensitive the shared data is, the higher the expected premium reduction becomes. Almost 20% of all respondents would categorically deny a policy which is priced based on behavioural tracking.
What insurers can do
Customers expect high quality basic services prioritising an online premium calculator, user-friendly customer portal, and efficient claims handling. The absence or poor implementation of these essential digital services severely impacts customer satisfaction, particularly among the younger demographics. Most respondents highlighted the claims process as a major influence on their perception of service quality and brand. Customer perceptions formed during the claims process are long-lasting and can significantly affect loyalty, either positively or negatively. While this requires insurers to focus on offering an excellent claims handling experience, they must also find ways to offer memorable brand interactions with customers who never file a claim.
Insurance products and digital services should be designed to meet customer expectations for convenience, ease of information access, personalised service, and short turnaround times, regardless of the technology used. GenAI for instanced has garnered significant interest and investment across various industries. While it has potential to increase efficiency and reduce cost, its application should focus on enhancing customer outcomes, simplifying their journeys in the background.
Customers are becoming more independent in researching insurance products before buying. Personal advice stays relevant, but the agent’s role changes
A notable change since our previous survey in 2021 is the increase in customers conducting their own research into insurance products. This shift is especially pronounced among individuals aged 65 or over, with self-research increasing to 40% from 22% in 2021. Despite the overall rise in digital self-learning (insurance web sites, aggregators, etc), the dominant channel for gathering information about insurance remains the agent. Under 30-year-olds tend to use more channels more frequently, including reliance on family and friends, while the customer support hotline is slowly gaining popularity among younger respondents.
Customers are most likely to consult agents or brokers when dealing with a complex policy, uncertain or volatile risks, or where potential damages exceed their financial capacity. (15). If respondents were offered a cheaper price by buying through non-personal channels, they would only use it in cases where it would not compromise their understanding of the product.
Respondents value most agents or brokers that take time to answer their questions (60%), who they can establish a personal trust or chemistry with (54%) or those that are able to demonstrate their subject matter expertise (47%). Agent recommendations from friends or family were ranked lowest at 20%.
The majority of respondents (84%) buy insurance via human contact (an agent, broker, or central office), though not always face-to-face. Only 16% use an aggregator or self-service option, possibly due to limited end-to-end online purchasing options. Younger people are more open to buying online.
What insurers can do
The survey results indicate a shift in customer expectations from insurance agents. Increasingly, customers view agents not as a purchasing channel, but as a source of trusted advice to help them understand risks and complex products and to offer tailored guidance, accessible whenever independent information gathering is insufficient. Consequently, agents should possess deep knowledge more complex policies and be equipped with the right digital tools to advise well-informed clients.
As their advisory responsibilities grow, agents are increasingly likely to encounter clients who seek information and advice, but ultimately purchase through a different channel. Therefore insurance providers may need to develop a remuneration structure for agents, based on a robust KPI framework, to reward their advisory services.
Market potential for life policies remains high. Selling life policies requires expert advice at the right time and place
The number of insurance policies in a household increase with the number of residents and with age. Within these multiple policy holders, the older demographic is more likely to have policies with more than one insurer. Having a life insurance policy did not seem to influence the number of insurers they chose. This suggests that selling a life insurance policy does not drive customers to purchase more policies from the same provider.
Interest in life policies rises with age until 50, then drops sharply. While 49% of respondents under 30 are considering a life policy, only 20% of those aged 50-60 are, and just 6% of over 65-year-olds. (21) The proportion of respondents who have considered buying a life policy but made a conscious decision not to do so increases with age. Older respondents without a life policy, who say they would not consider one, say they find them too expensive and without sufficient additional cover over public schemes.
Among respondents under 30 years of age who do not have life policy, 34% have simply not considered it and another 25% consider it too expensive.
What insurers can do
Surprisingly, selling long-term life policies to customers does not seem to increase the probability that they will buy their next non-life insurance from the same provider.
Whilst the current behaviour indicates the norm; the decision to research life insurance being tied to specific life events, such as marriage or the birth of a child, there is an indication that the younger demographic would be open to life policies but are either unaware or lack education to consider them. As customers age, their attitude towards life policies changes. After they start considering life insurance at some point in their life, they make a conscious decision on whether they would consider it, thus moving from general indifference to either openness and consideration, or categoric rejection.
Agents should focus on facilitating discussions with customers about their personal life situations and risks. Educating clients about life policies and how they fit the individual’s personal risk profile is crucial. This requires adequate tools, support processes, and remuneration structures for agents.
Methodology
Deloitte surveyed 1,005 participants between the ages of 18 and 88 in the German and French speaking regions of Switzerland during December 2023.
To obtain a representative sample of the Swiss population, participants from all age and income groups were included, with the focus exclusively on insurance for individuals (i.e., excluding small and medium-sized enterprises). To qualify as a survey participant, consumers had to be involved in the decision making on insurance contracts for themselves or their household, holding at least one non-mandatory policy (e.g. beyond basic health insurance and pension schemes). While the survey is representative for private insurance customers in German and French speaking Switzerland, the terms ‘customer’, ‘client’ ‘consumer’ and ‘respondent’ are used interchangeably throughout the report.
The primary objectives of the survey were to gain insights into the factors influencing policyholders’ choices in selecting insurance, and to compare the importance of digital capabilities and human interaction in the initial purchase and policy renewal processes. The survey also explored the receptiveness of customers to alternative policy providers and innovative insurance offerings.
Participants responded to questions about insurance products, from simple policies (such as motor, home and travel insurance) to more complex offerings like life assurance and personal pensions. They were asked to disregard mandatory health insurance and occupational pension contracts (mandatory BVG) when providing their answers.
The survey was designed by Deloitte and carried out by a specialist research agency, which arranged the sample and collected the data.The presented findings represent a subset of the data obtained.
