At the start of the Covid-19 outbreak, we could sum up the impact on public purchase intent in two words: loo roll. Now that the stockpiling is a distant memory, real priorities have started to emerge in the wake of the pandemic. Houses with outside space; the ability to interact with brands completely online; a better balance between being at home and in the office. These are all things people want more of following Covid-19.
In the financial services sector, other emerging priorities have become apparent, in the form of certain products trending in popularity. Our latest customer insight study sought to uncover how people’s financial product purchase intent has changed since the outbreak of Covid-19 – and how shifts in behaviour, attitude and intent can be formed into patterns to help brands better meet their customers’ needs.
Here are five headline insights we gained from the research.
Life insurance growing rapidly in popularity
One of the most easily discernible trends to come out of the pandemic is the increased interest in and purchase of financial protection products. Notable among these is life insurance, the growth of which has already been starkly evidenced in data shared by providers. In its six-month claims statistics, Zurich pointed to an increase of more than £14.2million in life insurance payouts compared to the same period last year, two thirds of which was driven by Covid-19 claims. The total amount paid out in the first six months of the year was £154million. Speaking when the figures were released, Peter Hamilton, Zurich’s head of retail protection, told the press: “Our claims data shows we have seen a marked increase in the number of customers and their families needing to claim on their life insurance policies, with this jump driven in part by the Covid-19 pandemic.”
Increased purchase intent has also been felt by providers, with many reporting a rise in the number of financial protection policies being taken out. Our study backs this up, finding that more than a third (34%) of people plan to buy life insurance within the next 12 months. This points not just to an increased desire among the public to take out a policy of this type, but also to there being a considerable number of people who at this point do not have life insurance in place. Providers who position themselves through good sales and marketing to be able to help people with this demand are sure to experience growing interest in the product going forward.
Stretched finances prompt personal borrowing
In mid-August it was announced that the UK is officially in recession. Between April and June, the economy shrank 20.4% compared to the three months before – the biggest slump on record. Household spending dropped massively, driving much of the decline, as people were ordered to stay at home as much as possible. Talking about the recession, Rishi Sunak told the BBC that the government was “grappling with something that is unprecedented” and that it was “a very difficult and uncertain time”. Will it be a V-shaped recovery? Donut-shaped? Hard for anyone to say at this stage. And it is this uncertainty – and the worries it fuels – that could well be behind our next finding.
People have already felt the financial impact of the Covid-19 pandemic. More than nine million people have been placed on furlough, but with many employers unable to ‘top up’ the 80% of salary paid by the government, employees have missed out. Some people have taken an even bigger pay cut, as the furlough scheme is capped at £2,500 per month. The tightening of personal finances and need to find additional funds has fed into an increased interest in borrowing among our respondents. In the next 12 months, 20% of people say this will apply for a credit card or balance transfer; 14% for a debt consolidation loan; and 11% for an unsecured loan. Overall, more than a third of people said they plan to borrow in the next year. This spike in borrowing would be in contrast to the first half of the year, in which the Bank of England said billions of pounds of credit were paid back on cards and other loans, with repayments vastly outnumbering new borrowing. For all of these products, Google remains the primary discovery channel, with credit card (42.7%), debt consolidation (36.6%) and personal loan (35.3%) customers including the search engine in their research process.
Second wave fears lead to forward planning
Another stat included in Zurich’s six-month update was the insurer’s total payouts for critical illness claims, which reached £42million in the first half of the year, partly driven by Covid-related claims. And with England’s Chief Medical Officer, Chris Whitty, warning that the UK will see “real problems” caused by Covid this winter and that we should not expect a vaccine to be in place before 2021, people are understandably concerned about what will happen should they fall ill. Will the NHS be overwhelmed? Will private healthcare be an option? Will people have enough money to live on in the event they are unable to work? These concerns are compounded by ongoing uncertainty surrounding the government furlough scheme, changes to SSP rules and issues around Universal Credit.
The results of our study support the idea that these concerns are feeding into an increased interest in health insurance, as well as protection products such as critical illness cover and income protection insurance. Just over a fifth of the people we asked said they plan to take out one or more of these policies in the next 12 months. For health insurance, 54.7% of people say they will use Google search to find the right product. A content marketing opportunity exists in the knowledge gap that surrounds the difference between health, critical illness and income protection insurance. An insurer who positions themselves as a valuable source of helpful information will not only be able to fill the knowledge gap for customers, but also enhance their website’s visibility and shareability, owing to the quality of the content. Advertising could be a valuable way to reach customers, too, with more than a fifth of this market saying they would be happy to click a PPC or social media ad.
Customer service shifting online
We’ve already seen in other sectors such as property how the pandemic has affected attitudes towards online and virtual customer service: 43% of homebuyers, for example, would now rather view a property and ask questions online than visit in person. Our study shows there is evidence of a similar shift taking place within personal finance. While this change may not be as pronounced as in the property sector (people have been buying financial products online for some time, particularly when it comes to borrowing), there is the suggestion that people are increasingly likely to prefer an online/remote/virtual research and purchase process, something made clear by the figures in this table.
|Percentage of people who prefer to research and buy financial products online
|Income protection insurance
|Credit card or balance transfer
Overall, two thirds of search users say that they now prefer online advice and customer service, even for complex products. This opens up a vulnerability for providers who do not have the capability to deliver this experience for customers, either because their websites lack visibility online, they don’t have enough channel coverage, or because they don’t have the tech (eg chatbots) in place to offer attentive customer service online.
Behavioural shift around some products
While financial products continue to be the ones people are most comfortable sourcing online, there has been growth in online purchase intent for more complex products such as life insurance. Put simply, people are increasingly willing to buy products like this online, without wanting in-person advice. When you also consider the increased desire for remote and/or virtual customer service experiences, it’s clear that for providers of some financial protection products, an optimised online advertising and marketing presence is essential. We also see growth in the level of trust surrounding online advertising for protection products. While loans and other lending services have been at home and finding customers in PPC results for years, it is more recently that customers have reported an increased willingness to click on adverts for certain types of insurance. Even so, the 14% of people who say they would click on a paid ad for life insurance is still some way behind the 65% who would do the same when applying for a personal loan. This could point to a wider distrust of online advertising when it comes to certain products, or perhaps of the sites which appear in search results for certain products. As with many insurance products, paid search results for life insurance are dominated by price comparison websites, meaning actual providers are beholden to them and their ever-growing CPAs. While taking them on in an Google Ads bidding war would not be feasible, any insurance provider that invests well in its all-round marketing mix – and positions themselves as a trustworthy, helpful and reliable brand – can reduce their dependence on acquisitions from price comparison websites.
According to our study, the most vital element of a financial services provider’s web presence is their website. Almost three quarters (72.7%) of the people we surveyed said a company’s website is essential to their consideration and purchase journey. Providers who have not updated their website for some time may miss out on sales, as our respondents report looking at video content, explainer blogs and customer reviews to help inform their buying decision. Those with older websites may also fall foul of the Google organic ranking algorithm, which prioritises site speed and user experience, primarily on mobile devices.
|Percentage of people who will click an online ad when researching and buying the following products
|Credit card/balance transfer
This is particularly pertinent when you factor in the next most important element of our audience’s purchase journey: a provider’s visibility and appearance in search engine results pages (SERPs). Here, 67.3% of people we surveyed said they would look at Google search results as part of their consideration process.
This is where an under-optimised website could hit a brand double hard: not only will it provide a poor user experience for the 72% of customers who hope to use the site to make a decision, but there is the strong possibility those people will never find it in the first place. Slow, outdated websites have only a slim chance of appearing in Google search results, something which is only made possible by having a fast, easy-to-use website filled with original, valuable content. Brands who fail to recognise the importance of optimising their sites on a technical and informational level are the ones who find themselves having to pay for all of their customers through price comparison websites or other costly forms of advertising. Costs on these sorts of channels are subject to near-constant inflation – and will continue to go up as the popularity of certain products increases, sparking increased competition between providers, not least within Google Ads’ bidding system.
The unfiltered noise and anything-goes nature of social media sees its importance in the purchase journey dip when compared to Google search and company websites. Only 37.2% of the people we asked said they would use social media as part of their research process, suggesting that while a robust, informative and customer-focused social media presence may be a good hygiene factor for providers, it is not as important to buyers as search and sites – the places where the real decisions are made.
What have we learned about how Covid-19 has influenced purchase intent? Here are some key takeaways for brands in the financial services space:
- Life insurance and health insurance look set to be the growth financial products over the next 12 months
- Hits to personal finance and fears of an extended recession mean people are putting in place plans for increased borrowing
- Job security and a second wave of Covid-19 are also big concerns, with people intending to buy cover including health insurance and income protection
- More than two thirds of people prefer to research and buy financial products and services completely online with no offline interaction
- People are increasingly happy to buy insurance products, including life insurance, via online advertising, as has been the case previously with financial products
Better insights mean better results
Across all sectors, the next 24 months are sure to present many challenges for businesses. How well you overcome them depends on the level of insight you have at your fingertips. We believe that deeper insights deliver better campaigns and great results.
What can you learn about your customers today? To ask any questions or discuss your challenges, speak to us now by calling 0800 0149 884 or by messaging us