Everywhere you hear and read about people struggling to make ends meet. Often this concerns high energy bills and lowering the thermostat as a solution to this problem. But of course, there are more ways to save. TJIP was specifically interested in how inflation and the prospect of a potential recession are affecting insurance. Due to increased inflation and the threat of a recession, many people feel they have less control over their finances and financial future. Especially when prices rose sharply at the end of last year (especially for basic needs such as food and energy) and there was a lot of uncertainty about how the economy would develop. Our research shows that 22 percent of respondents considered reducing or even canceling one or more insurance policies. This was revealed in a recent survey we conducted among a representative group of Dutch people. Good and timely financial insight can prevent such unwise choices, mainly focused on the short term.
Lack of insight
Furthermore, we found that many people do not understand the impact of market developments such as inflation and recession on their future financial situation. A significant group (43%) value this knowledge.
Budget for basic needs
Although inflation figures have fallen somewhat, many prices are still rising. We asked the group that indicated they wanted to adjust or cancel their insurance policies what they would use the freed-up budget for. Half of this group said they would use the extra money to buy groceries, which seems logical because food prices are still increasing, according to Rabobank. Additionally, the energy bill is a significant expense, and other fixed costs, such as water or municipal taxes or healthcare costs, would also be paid from the freed-up budget. It is clear that the money is not spent on luxury products but on basic needs. This is because many people are not adequately prepared for such changes. Otherwise, such emergency measures would not be necessary.
Role for financial service providers
Financial service providers can help consumers make better and smarter decisions about their insurance policies. Good insurance policies with the right coverage and the best rates can be a key to maintaining control and being prepared. At TJIP, we believe that everyone should have the opportunity to shape their own future. In an increasingly complex world, we want to help our customers gain control over their financial decisions. We support our customers in making the right decisions by enhancing their customer journeys with smart insights for both the present and the future.
The survey, which was conducted in the fourth quarter of 2022 by Kien PanelWizard on behalf of TJIP, among more than 1,000 Dutch people aged 18 and over, is part of the TJIP Innovation Lab, where TJIP gains new knowledge and insights and experiments with new technology.