Changes to welfare and pensions provision provide "a once in a generation opportunity" for intermediaries and insurers, according to an authoritative new report.
Advisers have a key role to play in seizing this opportunity, but the industry needs to improve its services to reconnect with the public, according to Swiss Re's Insurance Report 2013, Connecting generations.
But first they have to overcome consumer inertia, with too many people focusing on short-term financial survival rather than long-term planning. Most have other priorities for the limited amount of money they have.
Others have had a negative customer experience that may have turned them off insurance companies, with a knock-on influence on their children and future generations.
A key challenge facing advisers is to sell long-term protection and savings products, to consumers who have a short-term focus, said Russell Higginbotham, chief executive at Swiss Re UK & Ireland. "This year's report paints a startling picture of UK consumer thinking. While there are consumers who are switched on and savvy about financial planning, for a lot of people financial survival is about getting through to the next pay day.
"It's so important to listen to our customers and be aware of the bigger picture if we are going to provide insurance protection for as many people as possible."
The report finds that, although two-thirds of those questioned see the value of insurance, many of them find financial services and insurance uninteresting.
Focusing on people's real-life experiences can provide insights into how to address their needs. For example, people who have had personal or family experiences of negative events are more likely to respond to well-positioned messages and products.
Insurers have to find solutions to match people's short-term focus with long-term financial needs, while employers have a greater role to play in expanding access to financial provision, the report said.
Consumer research conducted for the report confirms that people are increasingly thinking more short-term about their financial situation. As a result, people start saving for retirement too late and do not place a high priority on financial products that would provide benefits later in life.
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