Keeping up with evolving consumer behaviour is a ’significant challenge’ for insurers, says insurance analyst

Insurers will need to adapt their policies to fit the evolving demands and needs of UK consumers who are continuing to work from home, according to data and analytics company GlobalData.

Its 2021 UK Insurance Consumer Survey, which was published in Q4 2021 and received 4,000 responses, revealed that only 19.1% of respondents believe they will be in the office for four or five days a week post-pandemic.

However, 53.2% of respondents expect to undertake a hybrid working model, attending their office for two or three days a week.

GlobalData insurance analyst Ben Carey-Evans said that although “this isn’t necessarily bad news for insurers”, they “will need to adapt several policies to fit the new climate”.

He explained: “The challenge for insurers is that the working world has suddenly evolved by decades in the space of one event, [requiring] them to adapt quickly or risk losing customers across a range of lines.

“Flexibility is likely to be the key, but the cheaper premiums that come with it are also unlikely to suit insurers [that] are often facing increased risk – particularly in commercial lines.”

‘Significant challenge’

The most obvious commercial lines risk for insurers is around property insurance, due to claims inflation and increasing premiums, which makes it “harder for insurers to maintain customers” while fewer people work in offices, said Carey-Evans.

Therefore, GlobalData believes companies should be offered flexible employee liability rates based on office attendance on different days.

Changing commuting patterns will also have an impact on personal motor insurance policies.

Carey-Evans added: “Insurers face more of a threat from competitors and startups here, as pay-per-mile car insurance is becoming more mainstream and fits perfectly with post-Covid employees.

“Overall, consumer behaviour has been transformed in the space of just a couple of years and it will be a significant challenge for insurers to keep up.

“The key will be to be as flexible and digital as possible and to increase contact with customers as much as possible.”