Leading insurance companies are establishing new avenues of revenue while contributing to their communities in the process. This is defined as umbrella insurance, a concept that has played a key role in the evolution of the insurance industry.
Take two major global airlines, Generali and Allianz, as examples. Generali is human safety net, supporting families living in vulnerable situations. Allianz has created an insurance product aimed at immigrants living in Europe. These insurers understand that inclusion at all levels is an urgent priority.of World Bank Group considers financial inclusion, an inclusive financial services term covered by comprehensive insurance, is a key element in reducing extreme poverty and promoting shared prosperity. Women, minority groups, and people from low-income areas Populations that are statistically underserved or excluded in the insurance market. This is important to keep in mind as underserved customers feel the pressure of the current macroeconomic environment. The growing need for affordable coverage suggests a growing opportunity for insurers with the right products and services. When we consider this statement as an insurance company, our mission is clear. Being financially inclusive allows the insurance industry to better protect the individuals and communities it serves while driving premium growth. Comprehensive insurance is an opportunity for increased revenue. This is not just a CSR initiative.
Two major ways umbrella insurance provides new revenue streams for insurance companies
Inclusive insurance in the retail insurance market creates avenues to protect traditionally marginalized populations and creates opportunities for insurers to expand and capture that market. There are two important points that are affected:
1. Attract new customers to traditional products
When insurance companies expand their circle of protection, they open the door to new customers. First, insurers can offer consumers new, accessible connection points. Previously uninsured consumers in this segment say they don’t know where to start with the insurance process. Because these consumers do not historically resemble typical insurance consumers, they lack detailed knowledge of how to determine eligibility and simply assume that they are not eligible for insurance. We know it’s possible. In this context, it is important to remember that emerging consumers, unlike other demographics, may not have access to family, colleagues, and communities who can educate and introduce them to the financial protection market. Fortunately, with the explosion of access through online, social, and app-based engagement, there are more options than ever to reach underserved and excluded communities. became. Insurers that leverage these channels to connect with consumers and influence behavior through an omnichannel approach are poised to succeed in capturing available market share. It is the power of conversion through easy-to-engage education that creates market winners for carriers and consumers.
Insurers also have an opportunity to change the perception that underserved consumers have about insurers. Fifty-five percent of the U.S. sample average of middle- and upper-income consumers with home or auto insurance say they would recommend their insurance company to others. In comparison, only 46% of low-income consumers (scores of 9 and 10 on a 10-point scale) do so.
2. Creation of new products that meet new customer needs
A. Expand your customer base
As explained above, in addition to attracting new customers to traditional/existing products, companies can develop new products/services that meet the needs of underserved or excluded consumer markets. You can also expand your customer base by creating (e.g., lower-priced products or products with shorter feature-period coverage).
for example, Allianz Emerging Consumer Business It aims to provide insurance to the poorest members of the economy. The company offers a wide range of insurance products for European immigrants (covering family members abroad), life insurance (term insurance, credit insurance, life savings insurance), personal loans and car insurance. We operate this program across all of our business operations, including: Unemployed people who need a car to get to work in France.
Making insurance more accessible may seem like a clear win and an intuitive part of any growth strategy. Historically, however, this level of care and inclusivity has not existed.
B. New products and distribution
Leverage data and analytics to create popular, innovative new products and creative distribution: Comprehensive insurance offers exciting opportunities for innovation across distribution and products. Insurers can evolve their current product portfolios to extend coverage to this underserved market through creative distribution that can serve in concert with, rather than in competition with, the current distribution landscape. It can expand, allowing insurers to create new and evolved products with different coverages tailored to real needs. of the segment.
Consider the home insurance market as an example. We found that the national average for homeowners insurance is $1,854 (for $300,000 in home coverage), which is nearly 18% more expensive than the top five cheapest home insurance companies. on average, Homeowners in low-income areas pay $117 more for home insurance. This trend is more pronounced in the largest cities in the 34 US states. Even though these consumers are paying more, they are underinsured for their needs and are less likely to use insurance coverage (e.g., flood coverage in non-flood zones). are over-insured.
The “premium” paid by low-income homeowners is equivalent to about 1% of the average median income in the lowest-income areas of large cities. In some states, this number can be as high as 11%.
European market opportunities
In 2021, for example, the European insurance company’s philanthropic division collaborated with Accenture to develop comprehensive insurance solutions that address the “protection gap” (the difference between economic and insured losses) that holds young families and immigrants back. Created a business case for developing. We are trying to build economic resilience. Accenture conducted an inside-out and outside-in analysis to help the foundation understand the market opportunity, investment potential, and social and financial impact of comprehensive insurance. New insurance products and premium changes have uncovered a market opportunity of approximately 250 billion euros in Europe. It is estimated that between €188 billion and €385 billion of insurance premiums will be at stake in Europe by 2025 due to ESG trends disrupting the market. Within this larger market opportunity, customers in particular began to explore comprehensive insurance opportunities valued at €14 billion, up from his €4 billion.
Conclusion:
There is no doubt that financial inclusion is an important topic of discussion among consumers, governments, and regulators.of G20 is committed to promoting financial inclusion and a diverse leadership team in the insurance industry that represents all interest groups. Comprehensive insurance not only positions your company as an innovator in your industry, but also future-proofs your business. Regulation of inclusion A business imperative for growth is ensuring we do everything necessary to innovate for historically excluded consumer segments. Inclusive insurance offers a clear opportunity for insurers to generate revenue and increase the industry’s economic opportunities, while embodying the industry’s core values of supporting and protecting individuals, businesses and society. Read our article to learn more about how insurance companies can continue to understand the people behind their policies, become more relevant, and grow. insurance consumer survey.If you would like to discuss further please contact us Heather Sullivan or Nina Muñoz.
