The report, entitled “How Insurers Can Support Their Customers in Uncertain Times,” examines how factors such as the cost of living, new technology, and data privacy are affecting consumer attitudes towards insurance and insurers.

The study was conducted by market research agency Censuswide and surveyed approximately 1,000 insurance consumers aged 18 to 55-plus years old in the UK, France, Germany, and Spain. The results show that while cost-of-living concerns continue to affect insurance spending for some, others are more interested in new technologies and data privacy.

Guidewire data points to proactive and preventative services

According to the report, there is an increasing demand from customers for more proactive and preventative services from insurers. Sixty-six percent of those surveyed in the UK said they would want access to services that warned them of potential damage before it happened, up 6% from 2022. Interest across Europe is even higher, particularly in Germany (79%) and Spain (82%).

Usage-based insurance (UBI) is also growing in appeal, particularly among younger consumers. Although the number of people in the UK with a UBI policy has only increased by 2 percent in 2023, the study found a greater shift in this direction among younger consumers. UBI use has grown by 5% for those aged 35-44 years, whilst the number of 18–24-year-olds with a UBI policy has increased 13%. Amongst those that do have a UBI policy, 35 percent say that they chose one because of the higher cost of traditional cover.

Data privacy has emerged as a key issue in consumer attitudes towards insurers, with more people becoming comfortable with data use in insurance. 

However, the report found that people are still wary about how their data is being used. “Trust around how insurers use customer data is essential to innovation and change in the industry,” said René Schoenauer, product marketing director – EMEA, Guidewire. “Insurers can really remedy this misunderstanding and should highlight how smarter, sensitive use of data equals better pricing, flexible personalised coverage, and even services that prevent damage and loss happening in the first place.”

Big Tech are becoming significant competitors to the insurance incumbents

The study also found that while competition from big tech companies such as Tesla, IKEA, and Amazon is still a concern for insurers, their appeal to customers is showing signs of decline. Thirty percent of UK insurance consumers said they would use the new Amazon Insurance Store available in the market, whilst a further 30% responded that Amazon is a trusted brand and so see no reason not to use it. However, 17% said that they would be concerned with Amazon having more data on them and so may not use it, whilst 13% answered that they would not use it at all.

The report found that four in ten (42%) consumers are still considering whether to reduce their spending on insurance. In 2023, home contents insurance is the most likely cover to be cancelled, overtaking travel insurance which led in 2022. This is being driven largely by younger consumers, with over a quarter (28%) of those aged 25-34 years and one in four (25%) of those aged 18-24 saying that they would cut spending on home contents insurance. By contrast, older groups are less likely to cut insurance spending with almost three out of four (73%) of over 55s saying it was unlikely they would make a reduction.

“That the cost-of-living is still top of mind for many is hardly a surprise given the economic outlook. What is striking is that while younger people would consider cancelling their home contents insurance, older customers do not want to reduce their spending on insurance despite financial pressures.”

Schoenauer added. “Given that the financial situation may remain difficult for householders for some time, this suggests insurers need to develop and deliver new, flexible usage-based offerings to their customers as quickly as they are able to. These should be available for selected, important possessions, or provide protection for specific damages. It is exactly this kind of innovation that will show insurance customers that their insurers continue to understand their needs and that they are there to support them no matter what challenges they face.”