The ability of character: How traits form preferences
My first blog Accenture’s recent survey of over 22,000 European consumers showed how COVID-19 has changed insurance requirements.
Consumer expectations and preferences change in different ways, although this shift will vary depending on the type of consumer. Age, gender, location, income level and occupation all influence insurance expectations. The most important determinant, however, is personality.
To better understand how personality traits influence insurance preferences, we divided our sample into four “personas”: pioneers, skeptics, pragmatists and traditionalists.
We divided consumers into one of these categories based on 60 variables that cover lifestyle, online literacy, perceptions of financial services providers, and expectations of new services.
In this way we came to the conclusion that 41 percent of Europeans are skeptics, 23 percent traditionalists, 22 percent pragmatists and 14 percent pioneers.
Analyzing our survey data through the lens of these groups offers fascinating insights. First, we can find out what is particularly important for certain consumer groups. Second, by repeating this analysis over time, we can see how personality traits change and better understand the impact on insurers.
A large minority of consumers are still averse to digital
The four groups of people have radically different preferences for dealing with insurers. Use mobile channels such as smartphones and tablets. The use of mobile phones has increased among all European consumers surveyed over the past two years.
While 91 percent of the pioneers interact with their insurer at least once a year via mobile online channels, only 68 percent of the skeptics and 62 percent of the pragmatists do so. For traditionalists, it’s only 19 percent.
As a result, insurers need to ensure that consumers can communicate with them in a variety of ways. While digital engagement is increasing, a sizable minority will either not – or not – use this channel.
The demand for personalized solutions is focused on progressive personality types
Another topic covered in my first blog is the growing appetite for personalized insurance solutions. This can be pay-as-youwalk Car insurance, health insurance where the premiums are tied to a healthy lifestyle, or some other form of insurance tailored to the needs of consumers.
Analysis of the survey data through the lens of the four people shows that this appetite for personalization varies significantly. For example, 82 percent of pioneers showed interest in household cybersecurity insurance, with premiums tied to using the latest anti-virus software and password managers, compared with just 54 percent of pragmatists, 45 percent of skeptics, and just 25 percent of traditionalists.
At the same time, 89 percent of pioneers and 86 percent of pragmatists are interested in car insurance, compared with 73 percent of skeptics and 72 percent of traditionalists.
Decline of the traditionalist
Our survey data helps us understand how insurance expectations and preferences differ between consumer groups and how these groups are changing in size.
In Europe, pioneers and skeptics have grown by 4 and 10 percentage points respectively over the past two years – with the increase in the proportion of skeptics being due to a decline in consumer confidence: only 31 percent of European consumers trust their insurer “very”. to maintain their data against 40 percent two years ago. Similarly, only 21 percent “very” trust their insurer to look after their long-term financial well-being, compared with 26 percent two years ago. (My third blog examines this dimension of trust in more detail.)
For comparison: the proportion of pragmatists has decreased by 2 percentage points and the proportion of traditionalists by 12 percentage points. The sharp decline in traditionalists is due to a rapid increase in the proportion of consumers using mobile devices for various activities. For example, 72 percent of Europeans use a smartphone or tablet to contact banks and insurers and to find out about new services and products. Two years ago it was only 59 percent. And Today, 49 percent say their phone is the primary device for accessing information and online transactions, compared to 37 percent two years ago.
It is important to monitor how the size of these groups of people changes. For example, traditionalists are most reluctant to use digital engagement channels. However, as the weighting of this segment decreases over time, the general aversion to digital media among consumers will also decrease.
A continent of skeptics?
Another interesting finding is that Europeans tend to be much more skeptical than the other nationalities surveyed. In twelve out of fourteen European countries, skeptics were the largest group. Exceptions were Germany and Russia.
In contrast, pioneers are the largest group of people in all of the countries studied in the Middle East and Latin America – and proportionally even larger in Asia. Many factors influence the adoption of digital channels, but the pioneer dominance in Latin America and the Middle East partly explains why digital usage is more widespread there.
There are also interesting differences within Europe. In Nordic countries like Denmark, Norway and Finland, pragmatists make up at least 30 percent of the population. The proportion of pragmatists, however, drops to 20 percent in Germany and Belgium and only 7 percent in France.
Most insurers don’t categorize their customers into personality types like this, but what our analysis does show that they should try to group consumers based on certain characteristics and interact with them in different ways.
While this wouldn’t enable fully personalized experiences, such an approach would help create more customer-centric and compelling consumer experiences – and ultimately a more profitable outcome for insurers.
To learn more about consumer preferences and trends in the insurance industry, read our study report on Insurance Consumers.