The initiative is the firm’s response to its own research, released last month, into the financial pressures currently experienced by Australians. The independent research found that 80% of Australians have made personal, financial and lifestyle sacrifices over the last 12 months due to cost-of-living pressures.
The survey of more than 1,000 people also found that nine out of 10 respondents reported impacts from the interest rate rises. However, one in five, according to the survey, reported “little or no knowledge of basic financial concepts like insurance.”
Jacqui Lennon (pictured above), head of retail for Zurich Australia & New Zealand, said two things stood out for her in the research.
“The first one was really around the breadth of the impact that the rate rises have had,” said the Sydney-based head. “The fact that we’ve seen nine in 10 Australians saying that they have been impacted by the rate rises I thought was quite telling and reflective of the time that we’re in at the moment.”
The second item that struck Lennon was how the rate rises are impacting the general stress level felt by Australian individuals and families.
“It doesn’t just create financial stress,” she said. “We’ve seen an increase in the number of Australians who are worried about things like: ‘what would be the impact on my family if I was hospitalized? What would be the impact on my family if I lost my income and didn’t have insurance?’”
Lennon said the research demonstrated that stress levels and worries had gone up significantly between 2022 and 2023. As a result, she said, more people are starting to understand what could happen if “things started to go wrong in their lives.”
“This is probably not surprising,” said Lennon. “But it is a really succinct way of capturing the vibe that we’re seeing out in the market at the moment.”
Insurance Business asked the Zurich head how today’s tough economic times compared to the 2009 global financial crisis (GFC)?
“I think what’s different about now to the GFC is that you’ve got this steady inflationary pressure and you’ve got the rate rises,” said Lennon. “What you’ve also got that you didn’t have during the GFC is the increase in mortgage volumes, so the property prices have gone up so much that everyone’s mortgages are quite high.”
She said her firm’s research data on financial stress also suggests that the current economic difficulties are having a bigger impact than the GFC.
However, Lennon said the 2021 Census data released by the Australian Bureau of Statistics, also provides insurance relevant context for the current pressures.
“The other thing that I think is interesting from an insurance perspective is the health of the nation, as reported in the census,” she said. “We’re a nation with increasing obesity rates and mental health issues so we’ve got financial pressures but also our health as a nation is not as good as it used to be.”
As a result of her firm’s concerns, Lennon said a decision was taken to “revamp” the information Zurich makes available to customers to help them with affordability challenges.
“We’ve added in some case studies and communicated more specifically around the options that customers have available to them,” she said. “It’s not a change in tactics but it’s definitely a change in focus and we’ve really upped our focus in this space to help our customers through these times.”
Lennon said the research also showed that when Australians have insurance coverage, they feel more empowered, more confident and less financial stress.
“We really want to give customers access to lots of information so they can take control and make it [insurance coverages] fit into their life the best they can,” she said.
What are you doing as a broker to help your customers deal with financial and mental stress from cost-of-living pressures? Please tell us below
