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The insurance affordability crisis: what’s your response?

The insurance affordability crisis: what’s your response?

A survey conducted by Premium Credit has shed some light on the affordability crisis in the insurance sector, with more than two million policyholders in the UK reportedly borrowing money from their loved ones, just to afford cover.
Your brokerage already has to contend with online aggregators and direct insurers, so what’s your strategy to win over – and offer support to – your price-wary customers in light of this industry challenge?
Amongst today’s consumers, there’s a perception that policies are a luxury rather than a necessity, shown by the fact that so many are willing to go without or opt for the bare minimum, leaving themselves exposed and underinsured.
Premium Credit found that over the last twelve months, 24% have cut back on the “quality” of their insurance cover, including for life (35%), home (34%) and travel cover (29%).
As this is a trend that has been predicted to continue, with a further 18% expected to cut back on insurance within a year, it’s crucial your brokerage develops a counter-strategy.
Over half of UK policyholders are underinsured
One in ten opt for a blind guess as to the value of their possessions
50% are aware that their behaviour voids their cover
Strategy and Marketing Director, Adam Morghem, credits this development to the fact that “many types of insurance premium have been increasing” over the years, pointing out that consumers are putting themselves at risk because they can’t afford the alternative.
Of those with policies in place, 66% claim they’ve seen a considerable price increase in the last two years, whilst 14% are only able to manage their payments by relying on loans or credit cards.
Who is most affected?

Millennials are most affected by this affordability crisis, given that one in three may never own a home, spending £53,000 on rentals by the time they reach their 30s.

As the next generation of consumers, it’s crucial that your business – and even the insurance industry as a whole – builds traction and trust with this group in order to secure longevity. The way to do this is through demonstrating your brokerage’s value.

The average annual cost of owning and running a car falls at £2,400, most of which is taken up by insurance at a price that’s steadily increasing year-on-year.

Unfortunately, this disproportionately impacts young motorists, with a minority resorting to great lengths to avoid hefty policy fees – either by claiming that they’re not the primary driver or by going on the road without cover.

There are one million uninsured drivers in the UK, which works out to be around one in every 38 cars on the road at any given time, so it’s apparent how extensive the affordability problem really is.

Another consumer generation that’s struggling to afford insurance is the over 65s. Seen as being “too high risk” by some insurers, experts are concerned at the number of retirees travelling uninsured because they “can’t afford – or object to – the premiums”.

Businesses within the finance sector – such as insurance and banking – see an abandonment rate of 83.7%, which is expected to be a result of the time and complexity involved in filling out online forms, compared to retail (77.3%) and fashion (67.6%).

So, how are you generating new leads and increasing your conversion rates, even with your most difficult-to-convert customers?

What's your response?

Senior Researcher – Nick Chadwick – suggests that “the engagement of millennials is more multi-faceted than what was seen with previous generations”, as they want to connect with brands through multiple online and offline methods.

In fact, he goes on to state that as it currently stands, those aged under 35 are more than twice as likely to buy insurance online, with over half preferring to work directly with providers as opposed to through intermediaries.

Yet, Baby Boomers are also adopting digital channels at a rapid pace to enhance their brand experience, with smartphone penetration in the 55-75 age range increasing from 40% in 2013 to 77% in 2018.

Today’s consumers are unable to navigate the insurance market, lacking the knowledge to make the right choice using self-service aggregators, and losing value and money by going direct to providers.

Your brokerage offers real market insight, value and savings, but unless you’re demonstrating that to your customers on a regular basis, you’ll be cut out of the process.

By all means, offer price reductions to your budget-conscious prospects, but don’t depend solely on this strategy as there will always be another business willing to go cheaper, and you could ultimately undervalue your expertise.

What’s next for your business?
At BriefYourMarket.com, we work with insurance professionals across the UK, helping them to deliver strong marketing messages to their customers with campaign guidance and high-quality content.
To find out how our multi-channel marketing platform can revolutionise your business’ approach to prospecting, contact our team on 0344 800 84 24, or from the link below.

Consumers and their cavalier attitude towards insurance

Consumers and their cavalier attitude towards insurance

When it comes to insurance, having the wrong cover can be as much of a risk as having no cover at all.
Yet it’s been reported by Insurance Business Magazine that a growing number of Brits are taking out policies without knowing – or caring – whether they would even be successful in the event of making a claim.
As it turns out, over half of UK policyholders are knowingly underinsured, with “violations ranging from switching jobs – and failing to notify the provider – to not locking doors when leaving the house.”
So, where has this cavalier attitude come from, and what can brokers do to combat it?
Brits and their personal policies
The UK’s total household value has surpassed the £1 trillion mark, with an average value of £35,000 per house. And yet, more than one in four do not have contents insurance – leaving £266 billion at risk.
One cause for this is that the insurance industry has been devalued in the eyes of consumers.
Comparison sites provide your customers with the ability to obtain and compare quotes in a matter of minutes, but when they’re skewing their answers to receive a more favourable figure, and those online self-service channels aren’t pushing for the full picture, is it any surprise that so many are now so heavily underinsured?
In fact, 50% will make “rough calculations” when taking out a policy, with one in ten opting for a blind guess as to the value of their possessions.
  • Aware that their behaviour voids their cover 50% 50%
  • Leave their windows open 34% 34%
  • Don’t lock up when they’re out 21% 21%
  • Won’t use their burglar alarm 17% 17%
Commercial and auto policies
SMEs are particularly at risk of being underinsured, as reports show they tend to go for policies based on ‘hunches’, and therefore miscalculate how long it would really take for their business’ revenue to return to a pre-loss level.
Following the well-publicised cyber crime scandals of 2017, you might assume that there wouldn’t be a single company in the UK left without cover, yet six out of ten (62%) have recently reported that their premiums are based on averages and other unknown factors, rather than an accurate analysis of their own needs.
So, should the worst happen – and they fall victim to a cyber-attack – a significant proportion would find themselves unable to recover from the financial fallout and reputational damages.
Another policy that’s often overlooked is auto insurance.
Despite the fact that half of UK drivers are aware that these actions will invalidate their policy, 31% will let other people drive their vehicle, 17% will travel with unrestrained pets, and 13% will not inform their provider of a change in employment.
How we can help
You need to encourage your prospects to seek out your professional expertise rather than relying on their own limited understanding.
We have the marketing content and tools that will raise your brand profile and engage your audiences’ attention.
Get in touch on 0344 800 84 24 to find out how we can benefit your brokerage.

Loyal customers are paying the price

Loyal customers are paying the price

It’s a sad truth that consumers face a “loyalty penalty” across a number of essential markets, which – as reported by Citizens Advice – could mean that many are overpaying by as much as £987 for energy, broadband and financial services.
With the Competitions and Market Authority (CMA) looking into the home insurance market as well as ComparetheMarket for “breaking competition law” at the end of 2018, your business critical focus needs to be on reinforcing your value to your customers.
Loyal customers lose out on £4.1 billion a year
In today’s competitive marketplace, brand loyalty should be rewarded, not penalised.
Yet Citizens Advice claim that essential service providers have been “undermining consumer choice by using processes which take advantage of people’s behavioural biases”, leaving many on “poor value deals” and affecting the most vulnerable the hardest.
Being penalised for customer loyalty, otherwise referred to in the industry as “price walking”, sees consumers paying more and more for every year that they remain with the same insurance provider – making their policy more profitable at their own expense. 


Now lack trust in businesses


Unaware of the 'loyalty penalty'


Stay put so they don't have to shop around

Over half (54%) of consumers are now under the impression that companies don’t have their best interests at heart, whilst one in six who have had a bad brand experience in the past have lost trust in other professionals from that sector.
If left to continue, this gulf between consumers and essential market brands could lead to more and more taking it upon themselves to obtain cover for themselves, using aggregators to do so and cutting the middleman – your brokerage – out of the process completely.
Consumers need help finding the best deal
There are a number of “key behavioural biases” that have a bearing on your customer’s ability to pick the right deal, according to Citizens Advice.
First and foremost, they’re overwhelmed with choice, so instinctively pick the default option.
They’ll also make their selection based on: seemingly irrelevant information (anchoring), how a particular deal is framed (framing effects), and the immediate benefits (present bias).
So, it’s essential that you’re communicating with them; reinforcing how much they could save by switching with your help and guidance, rather than allowing their policies to auto-renew.
Home insurance customers end up paying £75 extra per year than new policyholders, with 70% staying with their provider for longer than a year just because it’s easier.
The Renewal Calendar Email
To make things simple for your business and your customers, our Renewal Calendar Email enables you to send automated ‘request-a-quote’ campaigns that identify additional policies your clients need.
Using an interactive calendar, they’ll select the month that their cover for another policy is up for renewal, and  in exchange — your clients will receive an automated response and a triggered email that is sent prior to the month of renewal.
To find out how this feature will help your brokerage save valuable chasing time, automate renewal reminders and strenghten your broker-client relationships, talk to BriefYourMarket.com.

The Bateman Group and their BYM experience…

The Bateman Group and their BYM experience…

In 1967, The Bateman Group began offering “independent financial advice and insurance services” to individuals and businesses across the UK.
Five decades later, and their pursuit of “continued development and innovation” has distinguished them as “one of the most respected regional firms in the country”, whilst leading them to the implementation of a sound digital marketing strategy with BriefYourMarket.com.
With the help of our Communications Managed service, The Bateman Group have enhanced their customer journey, ensuring that they always meet their clients’ brand expectations and continue to develop as a business.
Here’s what they had to say about BriefYourMarket.com…
Thanks to BriefYourMarket.com, we’re now getting more clients involved in our brand; interacting with our email campaigns, visiting our website and also coming to us direct from social media sites like Facebook, Twitter and Instagram.
I would definitely recommend their services and what they can do to help boost your company image.
Our Customer Success Manager – Olivia Bullimore – really understands what our business needs, and the system areas where we can use helpful tools to gain interest from our clients and push things forward.
Chris Keenan – who’s taken over our Communications Managed account – has done a fantastic job developing new media and content for us, and has been really creative developing our designs and Instagram account. We’re aiming to have the largest follower base for any insurance broker in the UK.
The way that our designs have been improved shows an understanding and adherence to our brand and target market, which has enabled us to strengthen our position in the broking market and stand out from our competitors.
James Moore | Commercial Account Executive
What is Communications Managed?

In Communications Managed, we dedicate all of our time to putting together the most compelling content and email campaigns possible; ranging from market analysis articles to Instagram hashtags. This constant immersion in the marketplace allows us to keep up-to-date with what is happening across a multitude of industries, and therefore provide top-quality marketing to our customers. Just think of us as the extra person in your team!

Chris Keenan Personal Content Executive