Brokers and insurers are overlooking the opportunities in the UK’s over-50s insurance market, according to a new study by business intelligence and consultancy firm GlobalData.
The latest research shows that the over-50s market is often treated as one segment. However, its diversity is something that should be acknowledged and exploited by insurance firms to develop products and services that are more relevant to consumers.
“The over-50s market is highly diverse. Individual lifestyles differ due to a number of factors such as whether they are retired, whether they still have dependent children living at home, their health, and their financial freedom,” said Danielle Cripps, general insurance analyst at GlobalData.
“This is important because differences in lifestyle mean that the insurance needs of individuals also differ,” Cripps explained further. “The need for travel insurance, for instance, is much greater for an individual who has been able to fund retirement, is time-rich, and has no dependent children or parents to look after.”
Based on government data, 44.7% of the UK’s adult population is aged 50 or above as of 2015. This is forecast to reach 47.6% by 2025.
According to the GlobalData study, 57.0% of the over-50s UK population is economically inactive. These individuals are more likely to go on holiday and require travel insurance. Also, 28.9% of parents over 50 have an adult child still living at home and are more likely to need a multi-car policy and extra possessions cover.
Want the latest insurance industry news first? Sign up for our completely free newsletter service now.
Product marketing
Cripps said insurance companies should improve their product marketing in the over-50s segment. If they want to sell to this sector, then they should focus less on age and more on the different life stages associated with growing older.
“The main issue when it comes to the over-50s market is product targeting,” Cripps told Insurance Business. “Sign-posted ‘over-50s’ products and brands which are associated with serving the older demographic can be off-putting to customers. This is especially true if customers are below 65 and do not yet feel relevant for over-50s products. Brokers are reliant on how insurers market their brands and products.”
Cripps said brokers play a key role in driving growth in the over-50s market. According to GlobalData’s 2016 UK general insurance consumer survey, a notable proportion of the client segment still purchase through a broker.
“Brokers are important to the over-50s market as there is an increasing affinity for purchasing through a broker with age,” she said. “Brokers who support customers and help them to find the right policy are important to those in the segment seeking guidance and should be part of the distribution strategy for over-50s.”
Technology
Compared to younger generations, the over-50s market presents the same opportunities in the online space when it comes to technological advancements, according to Cripps. She said those over 50 and even 70 are still using price comparison sites to research before they buy, and are present on social media.
“The demographic should not be assumed to be technologically inept,” Cripps said. “Providers should still provide online channels for these customers and optimise their services for mobile, tablet, laptop, and desktop devices.
And while it is thought that millennials and the younger generations are more tech savvy, the over-50s are more affluent, Cripps stressed.
“This means they are more likely to be able to afford new technology such as smart home features, driverless car capabilities and other areas of technology that insurers are trying to connect with through the Internet of Things.”
Related stories:
Business opportunity for brokers at board level
Exploding client segment opens opportunity for brokers, insurers
