Customer Lifestyle Report Wave 2
Now more than ever, it is important that we stay close to our customers; to listen and understand what matters to them beyond their insurance needs. It’s been five months since we last checked in and we know the world around us continues to be challenging.
Consumers seek greater financial control
In our second edition of the Customer Lifestyle report, we’ve spoken to 2000 consumers across the UK to track financial considerations, delve into the decisions being made and the trade-offs they are faced with, especially in the lead up to Christmas.
Their responses paint a cautious but optimistic approach. Consumers are making decisions to improve their financial control and proactively making changes that their future selves will be thankful for.
The increased cost of living is impacting mental health
Although consumers report feeling optimistic about their long-term goals, 3 in 4 (75%) consumers feel concerned about the rising cost of living. When asked about the impact of financial security on one’s sense of wellbeing, 82% agree that it is an important factor. Half of consumers also agree that not being able to afford things negatively impacts self-esteem. In this context, over half of people surveyed described themselves as ‘getting by’ in terms of mental health. Those aged 18-24 appear to struggle more than older adults, but all age groups are making proactive adjustments to spending in the belief that it improves wellbeing.
Consumers are changing behaviours to manage increasing insurance costs
People continue to be intentional about spending. From an insurance perspective, car and home insurance remain top of mind when considering cost reduction opportunities, with 28% of consumers likely to try and reduce insurance costs within the next three months. However, this is a significant reduction from 53% in the last survey.
Our survey also showed that whilst 63% of consumers pay for their insurance annually, 1 in 5 are now open to switching to monthly payments to help manage their costs and budgeting. This number almost doubles for those aged 25-34 who display an openness to understand alternative flexible and embedded payment options. Where cost reductions aren’t possible for insurance, consumers are making deliberate changes to their short-term behaviours to accommodate with 74% of consumers have cut back on their overall driving and transport.
Managing costs has a heightened importance in the lead up to Christmas
For many, the run up to Christmas highlights the impact of the spending sacrifices they must make. Over half of consumers are concerned about the cost of Christmas, with a similar number accepting that they may have to make sacrifices this year.
In response, 76% will cut back on costs this Christmas, with most saying that they will at least reduce spending ‘a little’. Reducing costs on presents, eating out, food and drink are top of mind, but there is a noticeable reluctance to sacrifice social events like visiting friends and family. Spending time with family and friends and holding more modest celebrations are seen as a practical way to manage costs and improve wellbeing.
Consumers are making decisions that their future selves will be thankful for
Consumers are making short term sacrifices to help achieve their longer-term goals. Just under 6 in 10 consumers (58%) say they are on track to achieve their long-term goals and do not foresee delays. 70% feel that their current approach and spending behaviours will enable them to do so.
“We know that many people are having to make difficult choices about how they spend their money and with Christmas fast approaching, they may need to reduce spending on things that are not perceived as a necessity.
Although reducing financial commitments may be important, it is essential people are protected and have the right cover for their needs, for the times when they may need it most.
We know that financial pressures can cause additional stress and our report shows that a significant number of people describe their mental wellbeing as ‘getting by’. I would encourage our customers to read our mind health report which shares tips and suggestions to help protect your mental health and wellbeing.
We will continue to understand and respond to changing needs so we can remain relevant in our customers’ lives”
Read more about how we can strengthen our mind health and wellbeing at home, at work and online
Vicki Joshi
Chief Customer & Brand Officer at AXA UK & Ireland