"For insurance firms with policies that may offer peace of mind but are rarely something consumers really want to buy, it's even more important that barriers to sale are removed."
- Access PaySuite
The payment institution believes customer attraction and retention is crucial for revenue and long-term profitability in the insurance sector, “but everyone knows that the cost-per-acquisition is high, and loyalty is often elusive.” Ergo, while marketing, sales, and customer service teams play a role in “winning and retaining” customers, modern payment methods are essential to ensure positive and predictable cash flow.
Access PaySuite’s ‘Future-proofing payments in the insurance sector’ report surveyed 2,003 consumers in the UK to illustrate the importance of modern payment methods. When asked which insurance policy(s) they’d cancel due to premium affordability concerns, the most likely policy to be cancelled was Travel Insurance (35%), followed by Pet Insurance (30%), Health Insurance (28%), and Life Insurance (26%). The least likely to be cancelled due to affordability concerns were Motor Insurance (21%), and Homeowner/Renting Insurance (20%).
Most consumers preferred direct debit (57%) to pay for insurance premiums, followed by online card payments (38%), over the phone (18%), and paying directly from a bank account (17%). Notably, 80% of Gen Z consumers and over three-quarters of Millennials (77%) expressed a growing desire for more digital payment solutions.
Overall, 62% of consumers thought a wider range of payment methods would positively impact their choice of insurance provider, while 69% thought a choice of flexible payment methods would be important when choosing an insurance product.
Of those who said they’d had a bad experience when paying insurance premiums in the last two years, 39% said payments had continued to be made without their knowledge, 35% had struggled to cancel payments, and 33% were either overcharged or experienced failed payments.
Consequently, Access PaySuite has warned insurers against redirecting customers to third-party payment sites with unfamiliar branding, as any delays in the payment process will cause “frustration, drop-offs and potentially missed payments.”
When asked what factors were important when paying insurance premiums, the most popular responses were 'if my payment/data is handled in a safe and secure way' (42%), 'if I can spread my payments' (35%), and 'if a choice of payment methods is available' (29%). Likewise, consumers prioritised 'if I can speak to an agent' (28%), 'if I can pay on a mobile app' (20%), and 'if it’s digital and automated' (15%).
Commenting on these findings, Andrea Dunlop, Managing Director at Access PaySuite, said that in the ever-evolving landscape of consumer trends, “the heightened expectations of younger generations serve as a guiding light for the future of commerce. Businesses and industries that can adapt and innovate accordingly will undoubtedly experience the greatest success in the years to come.”
To download Access PaySuite's report, click the link here
