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Insurance AuditTrends and Attitudes on Health, Home and Auto

August 2009

Executive Summary

Discussions on health care, changes in

the economy and reductions in employer

insurance coverage are affecting how

Americans are learning about and purchasinginsurance products. Consumers view the

three categories of Health, Property and

Casualty, and Life Insurance differently and

they use different sources to get information

and make purchases. The latest Nielsen

Insurance Audit from Nielsen Claritas

(released every two years) identifies some

of the emerging insurance trends (such as

a decline in life and health insurance) and

purchasing behaviors with American

consumers. The study collected responses

from more than 35,000 consumers in May

and June of 2009.

Health Insurance

Given the proposal of a public health plan,

consumers were asked if they would prefer a

less expensive yet less comprehensive public

health plan subsidized by the government

to a privatized insurance plan that offered

more benefits and flexibility. It appearsthat although the private plan was the plan

of choice, many of the respondents (40%)

could not commit to an answer without

further information about what the details

of the plan would include. It is imperative

that health insurance carriers start to

increase their brand awareness, value

proposition and targeting efforts so that

consumers make the most informed decisions

once a public plan becomes available.

When we drill down into the penetration

of different medical insurance types, the

study notes that overall medical insuranc

is down slightly, but dental and vision

insurance are higher—an interesting findiis that for both vision and dental, it’s the

employer-based coverage that is down, b

individual coverage is up—so when consum

lose their coverage from work, they fill th

gap on their own. Heath Savings Account

and Flexible Spending Accounts are also bo

up but not from individual plan purchase

In this case, employers are increasing bene

and stepping up these offerings. The sam

scenario is also true for critical illness coverag

0

10

20

30

40

50

60

70

80

2005

2007

2009

MedicalInsurance

Catastrophic CriticalIllness

Dental Vision FlexibleSpending

HSA

     P    e    r    c    e    n     t    a    g    e    o      f     H     H

     O    w    n    e    r    s      h     i    p

72

8078

2118 19

2219 20

48

53 52

42

47 47

1215 16

68

10

Percentage of Household Ownership—Health Insurance

Don’t Know40%

Private Plan36%

Subsidized24%

Subsidized Public vs. Private—

Health Insurance

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Property and Casualty Insurance

With regard to shopping and switching

coverage, some consumers kept their

options open to new offers, with 46% of 

the respondents saying they have shopped

for auto insurance in the past three years.

However, only one quarter of those

respondents reported actually switching

carriers during that time. In addition, only16% of residential insurance customers

changed carriers in the past three years.

Most respondents statedthat they would be

willing to pay a little more for auto insurance

if it means they get better coverage; with 52%

of theparticipants eitherstrongly agreeing (15%)

or agreeingsomewhat (37%). Interestingly,

45% of the respondents said they actually

did have their auto and home insurance

policies with the same insurance company.

And good news for carriers who offer

both auto and residential coverage to their

customers: 62% of respondents would

prefer to have their auto and residential

insurance at the same carrier. The majority

of respondents surveyed (73% selected

8-10 on a 10-point scale where 10 is

extremely likely to recommend) said they

would be extremely likely to recommend

their primary auto and residential insurance

carrier to friends and family. Insurance

companies with a referral program will likely

benefit from this feeling of satisfaction

and goodwill.

Life Insurance

Despite the aging population, the percentage

of households with life insurance policies

has decreased steadily from 2005. Individual

life policies have also experienced declines(i.e., whole, universal life and variable life)

but individual term policies remained constant

between 2007 and 2009 at 23%. Reasons

for this could be that fewer employers are

offering life insurance as part of their benefit

packages or due to rising unemployment.

0

10

20

30

40

50

60

70

2005

2007

2009

Any Life Employer-based

Life

Term Life WholeLife

UniversalLife

VariableLife

Final/FuneralExpense

     P    e    r    c    e    n     t    a    g    e    o      f     H     H

     O    w    n    e    r    s      h     i    p

68

CCardMortga

Life

67

62

39

4442

29

23 23

3025

22

8 8 75 4

8 9 97 8 8

Percentage of Household Ownership—Life Insurance

For more information call (800) 234-5973 or visit us at www.nielsen.com

© 2009 The Nielsen Company. All rights reserved.

0

5

10

15

20

25

30

35

40

CaptiveAgent

Whole

Term

IndependentAgent

Direct-Phone

Direct-Internet

Employer

37

34

20 20

11 11

17 1719

23

       P     e

     r     c     e     n      t     a     g     e     o       f       H       H

       F     u      t     u     r     e       C       h     a     n     n     e       l       P     r     e       f     e     r     e     n     c     e

Future Channel Preference For Individual Life Insurance

lack of the personal relationship with the

agent—particularly when trying to influenc

the decision to purchase these policies fo

the first time. With penetration rates for

life insurance policies declining, insurance

carriers will need to deal with multiple

issues to grow this business, including achallenging economy, lack of importance a

part of retirement and investment plannin

Agent recommendations and covering

final/funeral expenses topped the list of 

reasons why individual life insurance policies

were purchased. However, future channel

preference for both types of policies moved

away from the agent. More consumers want to

purchase life insurance through direct channelsand their employer compared to 2007.

Insurance companies will have to increase

relationships with employers, offer alternative

direct channel options and provide clear

educational materials to make up for the