- 90 percent of insurance customers are interested in sustainable insurance products
- But only one in four has already taken out a sustainable insurance product
- Reluctance to pay more for sustainability
- Immense market potential for sustainable products – with qualified advice
Insurance customers are increasingly interested in sustainable insurance products, but there is a large gap between supply and demand. While 90 percent of those who want to take out a new insurance product in the next 12 months would choose a sustainable product, only 18 percent of those surveyed said they had been approached by an insurer about sustainability.
Currently, just 24 percent of insurance customers have at least one sustainable insurance policy. However, the willingness to pay more for sustainable products is quite low: only 19 percent of those surveyed would be willing to pay a higher price for sustainable insurance products.
These are the results of a study conducted in December on the importance of sustainability in the insurance sector from a consumer perspective, for which a group of 2,000 private individuals representative of Germany was surveyed.
“Many industries have long recognized the importance of sustainability and rely on it independently of regulatory requirements. However, insurance companies are still rather cautious and assess demand as low,” explains Patrick Pfalzgraf, Partner at EY EMEIA Financial Services. “Sustainability is more than a regulatory obligation and has huge potential for the insurance industry.”
The survey showed that for more than 82 percent of those surveyed, the topic of sustainability is a relevant factor for their next purchase decision – regardless of age, gender, school education or income across all social classes. For 84 percent of those surveyed, sustainability aspects are also relevant for insurance products and almost every second person who already owns an investment pays attention to sustainability aspects.
Almost every second customer does not know any sustainable insurance company
The group of customers interested in sustainable insurance is large at 90 percent of those surveyed, but a large proportion still feels quite lost. Because currently 45 percent of this target group would not describe any insurance company as particularly sustainable – they don’t even know who to turn to with their sustainability needs. This also explains why more than half of those surveyed (56 percent) would switch to a new insurance company for a sustainable insurance product.
“The potential for sustainable insurance products is enormous – unfortunately, many insurance companies are currently still misjudging the momentum from the customer’s perspective. The lack of contact and advice on sustainable insurance products is striking. Sustainable insurance products are currently a voluntary offer and customers often do not even know how insurance and the topic of sustainability are related. Targeted, competent advice and education with motivated and trained mediators are essential to address and convince those who are willing to act,” says Patrick Pfalzgraf. This assessment is reflected in the survey: 78 percent of those surveyed said it was important for their insurance advisor to have official certification when purchasing a sustainable product.
When asked specifically about their willingness to act, over 77 percent of those surveyed stated that they were willing to switch to a sustainable insurance product – provided that this did not result in any loss of benefits and conditions. In the 18 to 34 age group, this figure is as high as 81 percent. The main reasons given by those surveyed against a change are that they are satisfied with their current insurance or that they shy away from the expense of a change.
For Patrick Pfalzgraf, the results are clear: “The insurance market is facing a fundamental change, driven by customers and their need for sustainable products. Now it is up to insurance companies to leverage this market potential with a credible and transparent product design and convincing communication – before competitors such as up-and-coming InsurTechs do it.”
Here you can order the study free of charge.
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