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Life Insurance Market - Potential
Adina Nica – Mercury Research
© 2004 – Mercury Research
Objectives
• Awareness and usage of insurance services
• Life insurance
– Sales presentations success
– Owners profile
– Perceived advantage of using an insurance plan
– Barriers to using an insurance plan
© 2004 – Mercury Research
Methodology
• Quantitative study:
– 1,345 persons over 15 y.o., urban and rural
– maximum error margin: +/-2.7%
• In-depth interviews with non-users of insurance services
© 2004 – Mercury Research
Insurance Services Awareness
Base: 1,345 persons
68% 67%
56%52%
48%
Lifeinsurance
Houseinsurance
Goodsinsurance
CASCOinsurance
Pension fund
© 2004 – Mercury Research
Insurance Services Present Usage and Future Intentions
Base: 1,345 persons over 15 y.o.
5%4%
2%
6%
1%
7% 8%
3% 4%2%
Life insurance House insurance Goods insurance CASCO insurance Pension fund
Present Usage Future intention
At least one insurance product
13%
No insurance87%
© 2004 – Mercury Research
Life Insurance Regional Differences
Base: 1,345 persons over 15 y.o.
Total Transilvania,
Banat, Crisana, Maramures
Oltenia, Muntenia, Dobrogea
Moldova Bucuresti
Awareness 68% 65% 75% 54% 88%
Received sales
presentation 25% 32% 22% 19% 25%
Conversionrate
22% 23% 22% 5% 44%
Usage 5% 7% 5% 1% 11%
© 2004 – Mercury Research
Life InsuranceDemographic Differences
Life Insurance Users Population above 15 y.o.
*out of people who declared their incomes
• 30% household income over USD300
• 44% are 30-44 y.o.
• 36% above USD150 monthly personal income*
• 15% household income over USD300
• 25% are 30-44 y.o.
• 16% above USD150 monthly personal income
• 73% married • 58% married
• 45% have children • 29% have children
© 2004 – Mercury Research
Life Insurance Users Population above 15 y.o.
• 15% in Bucharest • 8% in Bucharest
• 46% in Transilvania, Banat, Crisana, Maramures
• 33% in Transilvania, Banat, Crisana, Maramures
• 69% live in urban locations
• 38% in cities over 200 k inhabitants
• 54% live in urban locations
• 21% in cities over 200 k inhabitants
Life InsuranceDemographic Differences
© 2004 – Mercury Research
Perceived Advantages of Life Insurance
41%36%
7%
18%
33%
22%
6%
35%
Protection forfamily in case of
death
Protection in caseof accident
Saving/investment
No advantage
Have life insurance (n=162) Do not have life insurance (n=749)
Base: 910 persons, who have heard of life insurance
© 2004 – Mercury Research
Barriers to using life insurance
Typology I: Single living, not married
Typology II: Beginners (in career, family life)
Potential users• 27-35• Bucharest• have been delivered a sales presentation• personal income over USD200 • income over USD150/family member
© 2004 – Mercury Research
Barriers to using life insurance
Typology I: Single living, not married, have sufficient income to pay for a life insurance
• Consider life insurance only for married people• The emotional benefit (safety/protection for the family) is
not relevant to them• Consider life insurance a secondary priority
• “If I die today the dear ones will suffer only spiritually not materially”
© 2004 – Mercury Research
Typology II: Beginners (in career, family life), have sufficient income to pay for a life insurance
• The emotional benefit (safety/protection for the family, protection in case of accident) is relevant to them
• Main barrier: uncertainty of the future • Prefer to invest money in something more tangible
• “Future is not safe”• “I better wait: if tomorrow things go better I will be able to
sign an insurance policy, but if it is worse, I take the risk to lose the money I pay until that moment”
Barriers to using life insurance
© 2004 – Mercury Research
Other barriers
• Lack of models (friends, relatives who have a life insurance)• Fear of possibility to lose the money invested
– money depreciation
– uncertainty about how the insurance company evaluates the money paid
Barriers to using life insurance
© 2004 – Mercury Research
• Life insurance - not high purchase intentions• Early adopters: young, higher incomes, married, with
children, living in large cities• Bucharest: high potential but sales force less aggressive
Conclusions
• Barriers in using card insurance- lack of relevancy of the main benefit- uncertainty regarding the future- lack of understanding of calculation procedures
• Advantages of having a life insurance: protection in case of death/accident
- strong, clearly understood by the users- less aknowledged by non-users- should be promoted to attract non-users
