Saying "I do" to niche insurance products...
With news from Travelers Insurance that over 30% of all wedding insurance claims received in 2011 relate to vendors or venue, it got me thinking as to whether the reasons why we buy insurance and what we buy might be changing.
Insurance has often been seen as a grudge purchase e.g. buying motor insurance only because it is a legal requirement, mortgage protection because the bank requires it to advance a home loan etc. etc. Is the fallout from the global credit crisis and the lack of innovation in mainstream insurance really changing the reasons why, what and how we buy insurance?
Let's take wedding insurance as a case in point. In my parent's day, the notion of buying insurance for anything wedding-related never even appeared on the wedding "to-do list". Today, with the average wedding costing €20,000, the need for insurance seems to regularly make the first page! The reasons why are clear. With more and more vendors and venues going out of business, a growing trend for foreign weddings and a noticeable increase in theft/vandalism-type claims who can blame the happy couple?
Does it follow therefore that there is now a game-changing shift happening within the industry towards well-designed niche insurance products? Are such products now being accepted as a desirable purchase which will respond in a very real way to something particular going wrong in a person's life rather than the more traditional price-driven personal insurance products that have not changed for decades and often do not provide the appropriate level of coverage?
Am I reading too much into it? Maybe. But perhaps the industry as a whole could take a leaf out of the wedding insurer's book and concentrate more on designing innovative customer-centric insurance solutions and products rather than trying to compete on price with tired products such as motor and household insurance. Remember, the easiest product to sell is the one the customer actually wants. Niche is good. Niche is the future.