You have worked hard to build a solid financial footing for you and your family, so you want to be sure that everything is protected. Accidents and disasters can and do happen, and if you are not adequately insured, it could leave you in financial ruin. You need insurance to protect your life, your ability to earn income, and to keep a roof over your head. As you evaluate the potential gaps in your insurance coverage, consider which policies you may want to include your short- and long-term financial plan.
Life Insurance – To help your loved ones cope financially by paying out a lump sum if you pass away.
TPD – Pays a lump sum if a severe sickness or injury prevents you from ever working again.
Trauma – To cover your medical treatment expenses that are not covered under Medicare or under private health insurance, if you were to suffer any serious medical conditions.
Income protection – Gives you regular tax-free replacement income if you are unable to work because of ill health or an accident.
The global pandemic has triggered a shift in consumer’s views on insurance protection, with many attaching greater importance to getting adequate cover.
About 30-40% of 7000 consumers in Australia and 11 other Asia Pacific markets who expressed fear of insufficient life and health protection have bought new or additional policies in the last six months, according to the survey.
Income protection, Trauma/critical illness and medical reimbursement are the three areas where people feel most inadequately protected. They would prefer having more coverage towards these three.
About 48% believe they are under-insured for income protection, 31% for critical illness, 30% for medical insurance, 23% for life insurance and 22% for personal accident.
This is an opportunity for insurers to respond to the growing demand for insurance protection.
“Given the financial stress inflicted by the pandemic, it is likely many consumers have not been able to purchase the level of protection that they would like to have for peace of mind,” Swiss Re says. “Hence, there is still a high percentage of perceived shortfall”.
“This is an opportunity for insurers to fill a protection gap by providing easily accessible, affordable, and attractive policies to increase consumer uptake and cross-sales of different lines of [life and health] business.”
Swiss re-carried out the survey in the January-February period. About 500 respondents are from Australia and the rest from New Zealand, China, Hong Kong, India, Indonesia, Japan, Singapore, Thailand, Malaysia, Vietnam and South Korea.
Below graph shows how COVID-19 has been a catalyst for online purchasing of insurance
The survey aims to provide insights into how COVID-19 has affected consumer behaviour and resulting implications for insurers.
Rising awareness of health and mortality risk has underpinned insurance premium growth during the pandemic The perception of being under-insured reflects in the observed growth in health insurance premiums during the COVID-19 crisis. Rising awareness of health and mortality risks have been a key driver of strong growth in health insurance premiums globally and in many Asia markets, while many other lines had experienced a decline.
In 2020, health insurance premiums in APAC grew by 10.5%3 . The increase contrasts with previous crises during which health-related premium growth has slowed sharply. The broad-based elevation of risk concerns also helped sustain growth in life protection insurance premiums last year, with volumes up 6.6% in APAC and 2.5% globally in 2020 as shown below:
Disclaimer: Above facts and statistics have been obtained from Swiss Re COVID-19 consumer survey 2021.