NAFCU Services Blog

Jan 06, 2022

Today’s Insurance Buyer May Surprise You

By Kym Ortiz | VP, Client Partnerships & Business Development | Franklin Madison

What if I told you that what you think you know about insurance, and why members don’t buy it from your credit union, is wrong? At Franklin Madison, we’ve noticed the shifts in demand for insurance, both over the past two years and over the longer term. We researched changing purchasing behaviors toward insurance through a survey of 551 consumers and shared our findings on a recent NAFCU webinar.

What we found will challenge a lot of conventional wisdom about insurance. Take a look:

Single people think insurance is more important to financial wellness than married people.

This finding really surprised us at first, but then we dug into the data. The assumption is that married people look to insurance to further shore up their established financial situation. Yet 59% of our single survey respondents saw insurance as an important component of financial wellness, compared to just 49% of married people. We realized that we were underestimating the importance of insurance to single-parent households. According to US Census data, about 25% of children live in a single-parent household, the vast majority of which are headed by mothers. Those single parents seem to feel the need more keenly to provide financial stability against the unknown.

highest income bracketsThe people who can afford the most insurance don’t know they can buy from their credit union.

It’s easy to assume that the cash-strapped have the least time to thoroughly research their purchase options. That’s not the case. We found data from a 2021 survey showing that the highest percentage of respondents who didn’t know if their primary financial institution sold insurance products were those in the highest income brackets.

We tested this relationship in our own survey and found another strong link! Namely...

The underbanked are more likely to buy insurance from a credit union than the financially established.

We identified cohorts of both financially secure and underbanked respondents in our survey and looked at their preferred channels to purchase insurance. Just under half of both audiences said they might use a dedicated agent. But almost twice as many (48%) of the underbanked said they would turn to a credit union or bank for insurance products compared to the financially secure. This highlights both opportunities to meet the obvious demand from the underbanked, and the need to amplify messaging to the more financially secure.

In our next post, we’ll share more details about who is and isn’t buying insurance and the most important adjustments credit unions can make to their sales strategy. You can also watch the full webinar with our survey findings and discussion anytime, right here.

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