Brand strength ‘decisive factor’ in life insurance decisions

In its 2024 Consumer Insurance Needs Report, Investment Trends found that while a large portion of Australians recognise the importance of life insurance, there remains a gap in perceiving it as a cornerstone of financial stability.

Out of the 20 million adult Australians, 6.7 million are covered by some form of life insurance, Investment Trends said.

“Even with 34 per cent of the adult population holding life insurance, it’s often seen as less integral than other financial tools,” said Dr Irene Guiamatsia, head of research at Investment Trends.

“This underscores the need for the industry to bolster the perceived value of life insurance in one’s financial portfolio.”

When it comes to selecting an insurance provider, it added, brand strength is the “decisive factor”. The research found that consumers are more influenced by brand recognition than by advice or premiums in their decision-making process.

Notably, Investment Trends said, 20 per cent of policyholders intending to switch providers seek assistance with policy cancellation.

“In a market where 800,000 Australians are interested in total permanent disability (TPD) insurance and 1.8 million are considering income protection insurance, the impact of a trusted brand cannot be understated,” Dr Guiamatsia said.

In addressing customer satisfaction, Dr Guiamatsia added: “The satisfaction ratings, with Zurich leading on client NPS and NRMA outperforming in life coverage satisfaction outside super, reveal a significant opportunity for life insurers to amplify their digital presence and user experience.

“Insurers are encouraged to heed these insights and align their digital strategies to meet the evolving preferences of consumers.”

The report also found that life insurance claims processing takes an average of 7.3 days within super and 5.1 days outside of it, while death benefit claims average around 10 days.

“Policyholders are clear in their desire for more straightforward and prompt claims processing. A seamless and efficient claims experience is vital for client retention and satisfaction,” Dr Guiamatsia said.

Investment Trends added that life insurance providers need to recognise the “nuanced expectations of Australian policyholders”.

“The industry is challenged to enhance brand trust, invest in digital interfaces, and streamline claims to elevate the perceived value of life insurance in achieving financial security,” it said.