EY survey into financial protection gaps in emerging markets
/A recently published EY survey, the EY Global Insurance Consumer Survey, seeks to understand the financial protection gap between consumers in emerging markets and those in developing markets, and how that is widening in current pandemic uncertainty.
The survey sought responses from over 4,000 consumers in seven countries across Africa, Asia, North America and South America.
The research looks into how the pandemic has impacted financial vulnerabilities and insurance needs.
Key findings of the study include:
Ninety-three per cent of emerging markets consumers plan to make at least some type of financial preparation due to the pandemic, while 61 per cent of those in developed markets are making such plans.
Buying new sorts of insurance is nearly three times as high in emerging markets.
Financial vulnerability and health concerns are more common in younger consumers in emerging market countries, pushing the drive for increases in insurance protection.
Those in emerging markets had a greater financial impact from the pandemic with 78 per cent of emerging-market consumers dipping into savings, 61 per cent lost income and 54 per cent had to skip bills or payments compared with developing-country consumers, with 33 per cent, 30 per cent and 22 per cent respectively.
Vaccination rates in emerging markets are considerably lower and concerns regarding the health of loved ones and financial wellbeing are considerably higher.
Consumers in emerging markets are younger (75 per cent under the age of 44 with just three per cent retired) without financial cushions and specific insurance cover. Just 10 per cent have $100,000 or more in investable assets versus 37 per cent in developed markets.
Just 56 per cent of emerging-market consumers have insurance cover for their home, versus 88 per cent in developed markets.
There is strong appetite for certain insurance products in both developing and emerging markets, for example, short-term products like funding college education or pays credit card bills in the event of a job loss, but the appetite for buying the proposed (survey) products was almost twice as high in emerging-market consumers.
Corporate social responsibility was high on the list of important factors in purchasing decisions, with 59 per cent knowing their insurers’ CSR stance at least somewhat well, with 25 per cent of emerging-market consumers choosing an insurance brand over another due to CSR reputation.
Overall, consumers want to be covered in the case of job loss and are willing to exchange data for lower prices. There is also an increased interest in usage-based and home-protection related products, with a shift in purchasing to digital channels.
