The KPMG report tracks the opinions of 75,000 consumers in 12 markets, throughout 6 consecutive waves of consumer pulse surveys, which took place between 29 May to 21 September 2020, to examine the changes and how businesses need to think and act differently in response to these trends.
Travel, tourism, entertainment and leisure have suffered the most from an erosion of consumer trust, due to the nature of the interactions, the concern around personal safety and the issue of refunds in the Travel sector. The report has identified four main trends across the 12 markets: economic impact, erosion of trust, rise of digital and home is the new hub. These themes highlight the pressures consumers are under, their feelings towards brands, and their changing behaviors in the new reality.
COVID-19 has affected consumer behavior. 37% of consumers claim they are working from home more than before COVID-19, and a high proportion will continue to do so in the future, especially as restrictions are reinforced. Moreover, 13% of consumers declare they have moved home as a consequence of this situation. This is more prevalent among those aged between 18 to 44 years old (23%). As a consequence, net confidence in walking and cycling is +9% vs. pre-COVID-19, while confidence in using your own car is +25%. On the other hand, consumers trust public transport far less than before (-37%). Routines have changed, and the road back to 'normal' is long, if indeed it ever happens. At the same time, going on holiday looks to be non-negotiable for many. Yet, only 14% of the respondents are planning to book a holiday in the end of 2020.
As far as the insurance industry is concerned, the KPMG report found out that Covid-19 has increased consumers' concern with regard to their own protection, as well as of their families. As such, they tend to prioritize savings, buy insurance to protect their assets and lives and looking for usage-based products to get better value for money. Globally, auto, home, life and health have all seen a boost in purchasing due to changes in consumer behaviors.
Also, in insurance consumer demand has forced the issue of digital transformation. But here, there is more ground to catch up. To really make the step, on a large scale, from personal, human touch to digital means of communication along the entire insurance process needs a lot of additional effort in implementing AI technologies and other customer analytics tools.
On the other hand, while the insurance sector has managed to maintain so far customers' trust, insurers will need to invest in earning consumer trust longer term. "One route is to personalize the conversation and talk in terms of long-term prevention and care, adapting the insurance 'package' to reflect an individual's circumstances and attitude to risk," the report shows.
The full KPMG report is available here.