It’s interesting to note that Austrians, on average, hold 3.44 insurance policies, which is a higher figure than their Swiss counterparts who are known for their insurance proficiency. Nevertheless, the Swiss lead the ranks when the total sums insured are considered.
As anticipated, the predominant factor for customers while choosing an insurance policy is the cost-benefit analysis or the price-performance ratio. This rings true not only for Austrians but for everyone. The highest level of satisfaction among policyholders is found to be related to car insurance, closely followed by home insurance.
However, health and life insurance policies do not share the same popularity. They score a mere 5.6 and 4.9 out of 10 respectively. This can be attributed not only to the low returns offered by life insurance but also to the complicated nature of these products. Florian Brunnader, a BCG partner responsible for the Austrian segment of this first-of-its-kind study, explains that the more intricate a product, the harder it is for consumers to comprehend its terms and conditions. The study was conducted with the participation of 1,000 consumers from each country.
Consumer advocates have been condemning the complexity of insurance conditions for many years. The industry, while showing some signs of improvement, still has a long way to go. Brunnader states that insurance companies have begun to acknowledge the need for change and are working towards enhancing transparency and comprehensibility. However, the extensive regulation by the supervisory authority contributes to the high complexity of insurance policies.
Comparison platforms
The push towards simplification is largely driven by digitalization. Austrians, like many others, utilize the internet to gather information and get quotes for insurance policies. However, they still prefer to finalize transactions in person, either through a broker or a sales representative, as indicated by a whopping 72 percent of the respondents.
Online comparison platforms do offer a general overview, but as Brunnader points out, not all providers are enlisted on such platforms. The belief that every product can be compared on a single platform should be discarded. Certain policies are simply too intricate to be included on these platforms. When a policy is purchased through a platform, the provider receives a commission, similar to how booking portals operate.
Integrated insurance is a trend that’s picking up, particularly in Austria and among younger customers. This includes travel insurance policies that are taken out at the time of booking a vacation, or vehicle insurance policies that are purchased when buying a car, and transport insurance policies that are bought when making online purchases.
Younger clients are more open to risks and are on the lookout for higher returns. A significant 26 percent of Austrians have expressed interest in insuring cryptocurrencies or NFTs. However, ESG (environmental, social, governance) related insurance policies have not yet gained traction.
