There’s no question that insurance customers care about sustainability, but how much are they willing to pay for it?
It turns out almost half of UK consumers would pay higher premiums to insurers with a proven track record for sustainability, while another 10.2% are willing to take it into consideration, according to the latest survey from GlobalData.
This puts the total percentage at more than half of insurance customers who are willing to pay higher premiums for an insurance policy if the insurer is proven to be a leader in sustainability.
Ben Carey-Evans, senior insurance analyst at GlobalData, said UK insurers should be doing everything they can to prioritise sustainability – even if it means charging higher premiums. In fact, a little over 20% of the respondents claimed they are willing to pay up to 5% more, with another 10% willing to pay up to 10% more.
The results came on the heels of the COP27 conference, Carey-Evans said, which reinforces the idea that the sustainability changes insurers pledge will be supported by their UK customers.
In another survey conducted in Q2 and Q3 2022, GlobalData found that 65.3% of small businesses felt sustainability was either important or very important, but it was ranked second to last in a list of factors being considered when purchasing an insurance policy. The highest factor was the cost of policy.
“Our latest consumer data represents a shift from that sentiment, as a sizable proportion of potential customers are putting sustainability above price,” Carey-Evans said. “While it may become harder for consumers to prioritise insurers that have a good track record for sustainability as the economic downturn really hits, it shows that consumers still feel very strongly about the issue and have certain expectations of businesses.”
For instance, several insurers have since put an end to potential contracts with high-pollution industries, as most recently seen with Marsh McLennan and Lockton’s exit from Adani Enterprise’s Carmichael coal mine in Australia.
“It is undeniable that sustainability should now be a core element of any insurer’s strategy, with GlobalData findings highlighting that it is something on which a significant proportion of potential customers will judge them,” Carey-Evans said.
