Insurance Outlook : Volume 8

The research focuses on the responses received from 1000+ people on the impact of external factors such as TV, social media, ratings, influencers, celebrity endorsements etc. on insurance buying. We already covered the influence and assistance paradigm in our Volume 2, this edition focuses on influences other than immediate social groups. This report explores factors that people consider credible from a detailed list of external factors. The report broadly explores:

• The factors influencing insurance buying that people consider credible from a list of external milieu (apart from their immediate social circle)
• The role of these factors in expanding the consideration set for insurance selection
• The pain points and reverse diagnosis of the bottlenecks around the degree of influence

People get highly influenced by financial expert videos and Google/Facebook ratings while looking for a suitable insurance partner

With the increasing adaptability of data on the phone, people use the internet to get information on a lot of subjects. When it comes to insurance, people simply check to get a broad level of answers to their queries. Videos of financial experts are considered to be the highest influencing factor while looking for insurance. The information provided by the experts is considered to be very genuine, unbiased and authentic. However, if the expert is advocating only one brand or product, people tend to not subscribe to the recommendations.

The initial impressions about the brand based on the 5-point star rating go a long way in featuring that brand in the consideration set of the customers. While checking on the 5-star rating, people also check the count below the ratings to make sure that the rating isn’t based on a minuscule sample. This rating is found be to reliable across age groups. However, people between 30-35 years are found to be greatly influenced (61%) by these ratings when it comes to insurance. Online written reviews also influence and shape the minds of people when it comes to considering brands at the time of final buying.

The influence of influencers’ videos is found to be slightly polarized than the influence of celebrities. 16% of people who find influencers trustworthy feel that influencers are speaking from their own experience and don’t promote a brand unnecessarily. Almost an equal proportion of people (17%) feel that the influencers promote brands for money and don't understand the insurance category at all.

People are often sceptical about the motivations behind celebrity endorsements. They wonder if the celebrity genuinely believes in the product they are endorsing or doing it for monetary gain, especially when it comes to financial products. The younger population (25 to 35 years) is better disposed to get influenced by celebrity endorsement than the older population (36 to 50 years).

Macro environment factors play a key role in expanding the consideration set for insurance selection but it has to pass friends'/family's recommendation test

Word of mouth plays a crucial role here as people don’t only suggest their insurer but also insurers they have heard good things about. 1/5th of people have made an insurance purchase influenced by ads seen on TV, social media or newspaper. However, they didn’t make any purchases without consulting their social group. It was a coincidence that the brands for which they had seen the ad were also advocated by their social group. People don’t buy insurance without careful deliberation. They require a fair bit of explanation about the category, brands, modes of buying and T&C. They rely on first-hand experience of the close social network.

Based on the recommendations, they finally choose the appropriate brand and mode. When it comes to the category influence of the ads, it is found that most people get influenced when buying their motor insurance. Health and life insurance are considered to be extremely personal and have a longer commitment, hence people don’t get influenced by the ads as much.

Trust and complexity are the prime reasons people don’t immediately get influenced by insurance ads

Many individuals in India have limited knowledge about the importance and benefits of insurance. They may not fully understand the various types of insurance policies available or how they can protect themselves and their loved ones. Without this awareness, the impact of insurance ads may be diminished.

Trust plays a crucial role in insurance purchases. People come across instances of fraudulent practices or improper claim settlements from their social group and news. This contributes to a lack of trust, making people sceptical of the promises made in insurance advertisements as a first response. Insurance policies are perceived to be complex, involving technical jargon and varying terms and conditions. Insurance ads, often limited to short durations, do not effectively communicate the intricacies of the policies. This leads to confusion and makes people hesitant to make a decision based on incomplete information. They prefer relying on detailed information received from social groups and agents to make an informed decision about insurance buying.

Insurance advertisements often cater to a mass audience, making it challenging to address the specific needs and concerns of individuals. This lack of personalized messaging reduces the impact of the ads on potential insurance buyers. This creates awareness about the brand, but it has to be featured in the recommendation set from social groups.