UK insurtechs need to build awareness of their products among consumers
While insurtechs generally offer more innovative insurance products than incumbents, capturing customers from existing players is always difficult. The majority of UK consumers, especially older ones, have not heard of many insurtechs, making improving brand awareness vital in growing insurtechs’ customer bases.
Only 27.8% of UK consumers had heard about one or more of the 11 insurtechs included in GlobalData’s 2020 UK Insurance Consumer Survey.
However, this proportion is much higher for younger consumers. 50.6% of Gen Z consumers (aged 18–23) had heard about at least one insurtech, compared to 38.2% of Millennials (aged 24–39), 26.0% of Gen X (aged 40–55), 14.8% of Baby Boomers (aged 56–74), and 11.5%% of those 75 and over. Insurtechs therefore have a much stronger footprint with younger consumers, who are generally more aware of new technologies and product offerings.
Gen Z is less likely to buy insurance products compared to their older counterparts for a number of reasons.
They are less likely to have dependents, limiting the attractiveness of protection products. They will also have lower incomes on average, limiting the penetration of non-compulsory insurance products. Due to their lower income and lack of savings, they are also more likely to be renters, making them less likely to hold home insurance compared to homeowners.
Therefore, insurtechs will have to wait some time before their products are relevant to this group.
To capture market share now, insurtechs will need to target older demographics too. This is exactly what DeadHappy, a life insurance insurtech, is set to do. Only 9.3% of UK consumers have heard about DeadHappy, but the insurtech will use a £2m funding deal with Channel 4 Ventures to increase the spend, and thereby the reach, of its TV campaigns. Advertising on mainstream media will help the provider to market its products across a larger audience, helping it to build awareness among all demographics, including older adults.