Customer Expectations for Sustainability in the Swiss Insurance Market

Abstract

Climate change is a significant threat, and insurance can provide a significant impulse to provide systemic responses. While several normative frameworks for sustainable business models have been developed, it is still unclear what customers expect and how companies should actually act in their specific business environments. We investigated customer expectations in the context of Swiss retail insurance and found that less than a fifth of customers consider sustainability a very important factor in their next purchase decision, and that core customers in the 35–54 age range are comparatively less concerned about sustainability in general. Customers place most value on social rather than environmental issues. Insurers should improve their efforts in the core business, especially regarding sustainable claims handling, rather than regarding investment management or their own footprint. On the other hand, more than 40% of customers do not feel they know enough to have an opinion about their insurer’s efforts toward sustainability, and there were no significant differences in customer perceptions among the different insurers. These results should have profound implications for communication, business model development, and business transformation efforts for insurers. They also provide important missing detail about customer expectations regarding sustainability in the academic literature.

1. Introduction

Environmental and social risks constitute the majority of the challenges we face globally, accounting for six of the top ten risks over a two-year time horizon, and for seven of them over ten years [1]. The responses to these challenges combine a number of private and public initiatives. While public–private partnerships hold promise as the more effective action [2], they need to better integrate sustainability concepts [3]. Thus, stand-alone but coordinated private efforts are a vital component of the responses to these challenges, both because of the role of the private sector in environmental degradation and because of its role in financial investments [4]. The insurance sector accounted for more than six percent of global GDP in 2017 [5] and therefore, in this context, should be an important component of these efforts. However, it is not clear how customers view the role and priorities the insurance sector should have when facing these challenges, especially when compared with other sectors [6]. This research aimed to understand the views of Swiss personal insurance customers to guide the contribution of the insurance sector in tackling these environmental and social risks.

1.1. Sustainability and the Private Sector

Sustainability is an important and increasingly significant component of business strategy. It is usually defined as comprising environmental, social, and governance (ESG) aspects, and this definition has evolved organically over time from corporate social responsibility (CSR) efforts [7]. One of the more recent frameworks was provided by the United Nations via their 17 Sustainable Development Goals (SDGs) [8]. The vast majority of global companies issue sustainability reports tracking their progress towards meeting sustainability targets [9]. At the same time, two thirds of them recognize climate change as a risk to their business, while social elements are acknowledged as a risk by half of global companies. Indeed, while significant and steady progress has been made towards achieving the United Nations sustainable development goals [10], it is also clear we will fail to meet the overall 2 °C global warming target and are on a trajectory to miss the 3 °C target as well [11]. Anthropogenic climate change is a reality we need to face, and there is no alternative to sustainable development. Rather than eroding competitiveness, sustainability can both lower costs and drive business innovation [12]. A successful sustainability strategy needs to be part of a company’s DNA, and coordinate the pursuit of all goals, rather than pursue them individually [13]. Several conceptual models have been developed to map sustainability strategies and supporting functional strategies [14,15,16]. Sustainable business models have been applied to at least 14 different business areas across 27 subjects [17]. Reporting on sustainability, especially environmental efforts, has become mandatory in several countries, and research has addressed the impact of reporting on financing and risk management, and its role in informing public policy [18]. Besides these normative efforts, research has found that the upfront cost of CSR efforts is more than offset by their positive effects over the medium- and long-term time horizons [19]. However, these effects appear to be modest in financial terms [20].

Publications have focused on broader political questions or have been written from a practitioner’s point of view. Academic research has been sparse and has generated a stream of case studies of companies intercepting macro developments towards sustainable development and adapting them to their business realities [21]. However, it is difficult to transfer SDG goals from the national scale to the highly variable context of individual businesses [22]. While it is generally acknowledged that sustainability is important, it is not yet clear what companies should actually do to pursue these goals [23]. Customer expectations for these efforts are also not yet well-understood. A study of Italian banking customers placed their highest expectations on diversity and equal opportunity and on customer privacy. These expectations do not vary significantly with age and educational level. They do, however, vary by gender, with women expecting significantly higher engagement in CSR activities than men [24,25]. A different study in Thailand found a strong link between DESG (digital environmental, social, and governance) efforts and gender, and concurred that women have higher expectations in this regard. However, it also found that younger, better-educated customers shared these expectations [26]. In addition, customer preferences for sustainable products vary significantly across industries. In addition, they tend to become weaker the more detailed and immediate the purchase decision [6]. The generational differences are also unclear. For example, while all generations have favorable attitudes towards organic food, Gen Z has the lowest purchasing behavior [27]. Environmental value and political orientation have been shown to be better predictors of environmental concerns than age cohort in the United States [28]. However, another American study showed that millennials are more environmentally conscious [29]. Supporting this finding, younger generations are more pro-SDG in attitude and behavior in Japan [30].

Thus, sustainability is considered necessary both to satisfy stakeholder and customer expectations, and as a source of innovation and business development. However, the details on how to pursue these goals are unclear, and the customer expectations informing these decisions are not well understood.

1.2. Sustainability in Insurance

Insurance is a significant component of the economy worldwide; premiums accounted for some 9.4% of GDP in OECD countries in 2020 [31]. It is part of vital business infrastructure, enabling companies to better understand and manage risk. Insurance reduces the risk of poverty and thus assumes a fundamental social role. It also orchestrates a vast network of service providers through underwriting and claims management. Thus, private insurance can assist governmental authorities in redesigning mitigation and risk transfer strategies for societies [32,33] and can be as effective as direct subsidies in driving innovation in sustainability across the overall economy [34]. Financial service companies can support and direct the transformation of the whole economy; however, they do so in different measures. For example, the public stock market (defined as socially responsible investments and shareholder activism) has only a limited impact on the sustainability of economic performance; lending and venture financing are more directly involved in a company’s funding and have been shown to have a more direct and significant impact [35].

Insurers have responded in several ways to emerging climate risks beyond better predictive models for losses. They have developed approaches to enable customers to improve their resilience and have developed products to incentivize certain behaviors, such as pay-as-you-drive automotive coverage. They have also become more selective in their risk appetite: for example, by excluding climate liability coverage. The curtailing of risk transfer opportunities can send strong signals to companies to change their behavior [36,37]. Engagement in CSR has also been proven to improve insurers’ stability. A study of 94 listed insurance companies linked higher Z-Scores, and therefore lower probability of default, with higher CSR scores, especially those linked with environmental and social efforts. Governance efforts, on the other hand, were not seen as relevant for stability [38].

Products used to address the risks posed by the climate have long been recognized as a source of market differentiation, business growth, and improved risk selection for insurers [39]. The focus of sustainability in insurance can vary significantly across lines of business. Green and sustainable efforts in life insurance, for example, have focused on the ethical use of personal genetic data, ethical operations, and firm sustainability rather than on environmental components [40]. Historically, insurers have tended to be active in social issues and governance. They have been significantly less active regarding environmental issues. Their efforts have focused on internal waste and energy management and greenhouse gas emissions. The development of sustainable products, environmental risk analysis, and sector exclusions are lagging behind [41].

Because of the systemic nature of climate risk, there is a need for a coherent sustainability strategy encompassing the entire business model of insurers [42]. However, it is not clear how insurers can leverage customer priorities to build longer-term plans. Customers do not closely associate any sustainability topic with insurance, as is the case for, for example, climate change and the aviation or automotive sectors [6]. This gives insurers some flexibility to develop a variety of approaches and business models; on the other hand, it makes for a more difficult strategic choice and accompanying communication strategy. Little academic research has been conducted on customer preferences for these strategies, and anecdotal evidence from practitioners we have interviewed is contradictory. However, some research has been published specifically on the views of Swiss insurance customers. Swiss customers have shown little patience for understanding the technical details of insurance and tend to find the topic foreign [43]. They also do not think insurance is particularly relevant or that it can provide meaningful support regarding their key personal decisions [44]. On the other hand, they have high trust in insurers and are willing to share personal data to a large extent [45] and communicate with insurers on their most personal channels [46]. Thus, while generally open to a closer link with insurers and accepting of their role, Swiss customers do not perceive insurers as particularly interesting or relevant. It is therefore of interest to researchers and practitioners to understand how this sentiment applies to sustainability in an insurance context.

1.3. Research Question

The literature discussed in Section 1.2. points to the fact that insurers can benefit from sustainability efforts directly while at the same time providing a significant incentive for societal change towards more ethical and beneficial behaviors. However, they seem to be embracing these efforts somewhat reluctantly, especially in their core business. This may potentially be due to the lack of clarity about how businesses can proceed in practice in their specific business environment or an insufficient understanding of actual customer expectations. Our research aimed to support the development of more effective sustainability efforts in insurance by developing a better understanding of customer expectations. We therefore provide the following research question:

What are retail customer expectations for insurers regarding sustainability?

We aimed to understand how the answer may vary with customer demographics, goal type, area of engagement, and across insurance companies to provide practical insights for insurers on their next development efforts in the Swiss market and enrich the existing body of literature.

2. Methodology

In order to conduct the analysis, we surveyed Swiss customers of retail insurance. The authors developed the structure and wording of the questionnaire together with a panel of experts from several Swiss insurance companies. This was done to ensure the results can contribute to the body of research in this field while retaining immediate relevance for the Swiss insurance industry.

Participants were asked to provide demographic information for sampling purposes, followed by information about their insurance company for different coverages. They were then asked to select their top five out of the 17 UN sustainability goals and to rank both the engagement of their insurance company in pursuing these goals and how relevant these goals would be to their next insurance purchase. The questionnaire then introduced seven different specific areas of engagement, summarized in

Table 1. Areas of engagement.

Name	Description
Employees	Which areas should your insurance company be especially active in to support their own employees?
Footprint	Which measures should your insurance company engage in to reduce their own environmental footprint?
Nat Cat	Which measures should your insurance company engage in to protect against natural catastrophes?
Investments	Which projects should your insurance company invest in to further develop sustainability?
Pensions	How should your insurer consider sustainability criteria in their private pension products?
e-Mobility	Which areas should your insurance company be active in to support electric or hybrid vehicles?
Claims Adjusting	Which areas should your insurance company consider investing in to improve the sustainability of their claims adjusting?

, each with a number of predefined options for engagement. Respondents were asked to pick their top three or five measures within each area, depending on the number of options. The top three picks and the frequency of each choice are listed in Appendix A 

Table A9. Top three preferences ranked by survey responders by area of engagement.

Area	%	Top 3 Topics
Employees	55%	Gender equality (e.g., equal opportunities, compensation, and career requirements)
	49%	Balance between family and work (e.g., part-time work, job sharing, etc.)
	47%	Flexible work times (e.g., by supporting working from home, mobile working, flexible work hours)
Footprint	49%	Reduction of CO2 emissions
	48%	Reduction of waste
	43%	Education of own employees towards environmentally conscious behavior
Nat Cat	63%	Investments in projects against flooding (e.g., building dams or repairing bridges)
	61%	Planting of wooded areas to protect residential areas or infrastructure against landslides or avalanches
	51%	Issue of local-area warnings for natural catastrophes
Investments	67%	Investment in solar plants
	59%	Investment in living accommodations for socially or financially disadvantaged families and individuals
	52%	Investments in new technologies to sequester CO2 from the atmosphere
Pensions	68%	No investment in companies that employ child labor
	62%	No investment in companies that manufacture any kind of weapon
	32%	No investment in companies in the sex industry
e-Mobility	49%	Charging the same price throughout Switzerland
	47%	Europe-wide assistance network for electric and hybrid vehicles
	41%	Insurance coverage for theft or damages to electric charging stations
Claims Adjusting	79%	Repair rather than replace defective parts
	70%	Employ local claims adjusters and local craftsmen/mechanics
	68%	Careful disposal of, for example, total loss vehicles

.

Participants were then asked to rank each area in terms of (a) importance to them; (b) the engagement of own insurance company; (c) its relevance to their next insurance purchase; and (d) how they perceive this area of engagement to be actually linked to sustainability. All of the rankings were elicited along a 5-point Likert scale, with 1 indicating the highest/most important and 5 meaning the lowest/least important, or the equivalent for that dimension. The dimensions were analyzed individually and in pairwise combinations in order to understand especially whether insurance purchasing decisions are linked to the overall importance of sustainability, and whether insurers have engaged in areas that are important to customers or relevant to their purchasing decisions. These comparisons were conducted either using the absolute value of the responses or the deviation from the average depending on the suitability to visualize the insights gained.

The survey was conducted in February 2022, in German, using the customer panel of the marketing company Bilendi and was completed by 1461 individuals: 738 identified as women, 719 as men, and 4 as non-binary. Six age cohorts from <25 to ≥65 were roughly equally represented with 223 to 266 responses each, as shown in Figure 1. The color codes for age cohort and gender will remain consistent throughout the paper to facilitate easy reading.

While not used for sampling purposes, more than 50 responses were obtained from customers of the nine largest P&C and Life insurance providers in Switzerland. We selected this threshold as the minimum number of responses to conduct an analysis by insurer, collating insurance companies under this threshold in the category “Other”. The basis of the analysis was the customer portfolio by the line of business automotive third-party liability (Motor TPL). For pure life insurance players, we used the life insurance portfolio. The analysis was also run for other lines of business and the results were consistent.

3. Results

The analysis of the results will first investigate overall preferences for sustainability in general, then by gender and age cohort. Then we will look at the different areas of engagement, again overall and by gender and age.

3.1. Overall Results

The frequencies of the top five preferences for each of the UN sustainability goals are shown in Figure 2a. Pursuing ‘Zero Hunger’ was viewed as important by about half the respondents, with ‘Good Health and Well-Being’ close behind in second place. ‘Partnerships for the Goals’ is in last place, accounting for less than 10% of preferences. When summarizing by type of goal along the ESG criteria, as shown in Figure 2b, more than half of responses value social goals ahead of environmental goals, which account for about a third of the preferences. Governance goals rank third by importance, accounting for just above 10% of preferences. Each of the 17 goals were assigned by the authors to one (though, in three cases, to two) of the ESG categories.

These preferences do not change significantly by gender, with the highest variations at around 10%. Goal 5, ‘Gender Equality’, is an important exception, with more than a third of women considering it a top-five goal vs. less than a quarter of the men. In contrast, men show higher preferences for Goal 8, ‘Decent Work and Economic Growth’, and Goal 9, ‘Industry, Innovation, and Infrastructure’. This results in a slightly higher (+3%) preference for social goals among women and a corresponding higher preference for governance goals among men. These preferences are also almost identical across age cohorts, with social and environmental goals varying by less than 4% and governance goals by less than 1%.

3.1.1. Engagement

Overall, the respondents rated the engagement of their insurance company at 2.9 on a scale from 1 to 5, slightly better than the middle point. Women scored insurers slightly better at 2.8; men scored them slightly worse at 3.0. However, less than 60% of respondents felt they could even judge the engagement of their insurer for sustainability, as shown in Figure 3b. Of these, only very few ranked the company as very engaged; however, the sentiment was overall positive, with multiple ranking the company as engaged, and only some 15% ranking the company as less or not engaged. The distribution of these responses did not vary much between age cohorts or by gender, as shown by the example of the important new customers in the 25–34 age group (Figure 3a).

This is different for the proportion of respondents not able to gauge their insurer’s engagement. This figure varied by age cohort, with some 45% of those between 35 and 64 and about a third of those <25 unable to gauge engagement. It also varied by gender: half the women vs. a third of the men did not know or could not judge their insurance company’s engagement (see Section 3.1.3 for more detail).

3.1.2. Relevance for Insurance Purchase

The results regarding the importance of sustainability are summarized in Figure 4b. Sustainability was considered a very important factor in their next insurance purchase by only about 15% of the respondents. For another 50%, it is important alongside price. For the remaining third, sustainability is less important or not important.

The proportion who considered sustainability as very important as a stand-alone consideration did not vary greatly across age cohorts. The implication for insurers is that there does not seem to be a growing concern for sustainability with the younger generation and that they need to remain focused on a proper pricing strategy. Looking at the combination of sustainability and price by age cohort, we see that the very young and the very old are more open to this option. For current core insurance customers in the 35–54 age range, sustainability was not an important consideration for more than half of the respondents. This dynamic was not expected and was therefore not investigated in the survey. One potential interpretation is linked to salience and attention span. The younger cohort is concerned about their future and the older cohort about their legacy. In the middle, daily concerns and time constraints may outweigh longer-term considerations.

3.1.3. Relevance and Knowledge

In the previous sections, we have seen that knowledge about an insurer’s engagement and how relevant this knowledge is to the customer’s next insurance purchase vary to some extent by age cohort and gender. Figure 5 displays these values relative to the average for the entire sample. Across age groups, there is a correlation between the ability to gauge an insurer’s engagement (right side of the graph shows higher ability) and the relevance of this information to the customer’s next insurance purchase (upper side of the graph shows higher relevance). That is, groups that value the information more also believe they have the information. It is, however, unclear if those who value the information searched for it, or if the availability of the information allowed it to be considered. This relationship, on the other hand, breaks down by gender: compared to men, women place more value on this information but think they are less able to judge it.

3.2. Preference by Area of Engagement

Insurance companies can engage in sustainability in many different areas. Respondents were asked to score seven of them along four different dimensions, as summarized in

Table 2. Scoring by area of engagement (1 = very high; 5 = very low).

Area of Engagement	Importance to Customers	Engagement of Own Insurer	Relevance to Insurance Purchase	Link to Sustainability
p value (w/o e-Mobility)	<0.001	<0.001	<0.001	0.67
Nat Cat	2.15	2.68	2.58	2.41
Footprint	2.16	2.66	2.59	2.46
Claims Adjusting	2.23	2.77	2.58	2.43
Pensions	2.24	2.59	2.51	2.45
Investments	2.26	2.71	2.68	2.45
Employees	2.36	2.63	2.46	2.46
e-Mobility	2.73	2.81	3.06	2.65

. All areas were considered to be more important than the middle value of three, with protection against natural catastrophes and the company’s own carbon footprint being most important to customers. In third place is the process of claims handling, followed closely by most other areas. Company engagement in these areas and their relevance for insurance purchases follow a similar pattern. Some variations will investigated later in the section.

All areas are linked to sustainability in the eyes of customers; however, they are not statistically distinguishable from one another. Special consideration needs to be given to e-mobility, which customers considered significantly less linked to sustainability and less important to them; it is also the only area below the middle of the scale for relevance to insurance purchase. This may be linked to the topics selected for consideration (see Appendix A Table A9); however, it may also be an indication that customers cannot yet quite connect insurers’ efforts in e-mobility with the core function of insurance.

The perceived engagement of their own insurer and the relevance to the next insurance purchasing decision are plotted against the importance of each area relative to the averages in Figure 6a,b, respectively. There does not seem to be a link between these dimensions. Nat Cat and footprint are important to customers, but insurers scored only average. They scored high in pensions and employee support, both of which are relatively unimportant to customers. A clearer signal can be interpreted regarding sustainable claims adjusting: insurers should engage much more with this topic (Figure 6a).

The results shown in Figure 6b are more puzzling: overall, there does not seem to be a positive correlation between what respondents see as important and how it will impact their next insurance purchasing decision—in fact, the opposite seems to be true. Respondents seem to be able to distinguish what is important overall from what is linked to insurance.

A more actionable signal for insurance companies can be derived from Figure 7. Overall, it indicates that insurance companies have by and large focused on the issues that are relevant to purchasing decisions. However, they seem to have been overly focused on pensions, footprint, and investments. The feedback from the survey indicates that they should put considerably more effort into employees and especially into sustainable claims adjusting.

3.3. Impact of Gender and Age

The differences detected according to age and gender in the overall results in Section 3.1 continue to be relevant when investigating the individual areas of engagement (see Appendix A 

Table A1. Importance to customers by age and gender.

		Age Cohort							Gender
Importance to Customers		<25	25–34	35–44	45–54	55–64	≥65	p Value	Women	Men	p Value
Nat Cat	2.15	2.18	2.34	2.28	2.23	2.05	1.75	<0.001	2.05	2.25	<0.001
Footprint	2.16	2.06	2.20	2.31	2.29	2.15	1.89	<0.001	2.07	2.25	<0.001
Claims Adjusting	2.23	2.21	2.38	2.38	2.34	2.13	1.87	<0.001	2.13	2.32	<0.001
Pensions	2.24	1.99	2.35	2.44	2.41	2.18	2.03	<0.001	2.10	2.39	<0.001
Investments	2.26	2.12	2.37	2.45	2.42	2.17	1.96	<0.001	2.14	2.37	<0.001
Employees	2.36	2.10	2.46	2.56	2.53	2.35	2.11	<0.001	2.26	2.47	<0.001
e-Mobility	2.73	2.65	2.95	2.76	2.82	2.71	2.42	<0.001	2.77	2.69	<0.001

,

Table A2. Engagement of own insurance company by age and gender.

		Age Cohort							Gender
Engagement of Own Insurer		<25	25–34	35–44	45–54	55–64	≥65	p Value	Women	Men	p Value
Nat Cat	2.68	2.64	2.85	2.80	2.72	2.63	2.37	<0.001	2.63	2.72	0.07
Footprint	2.66	2.57	2.72	2.75	2.78	2.63	2.49	<0.001	2.58	2.74	<0.001
Claims Adjusting	2.77	2.76	2.78	2.85	2.92	2.76	2.53	0.001	2.71	2.84	0.02
Pensions	2.59	2.37	2.60	2.70	2.71	2.64	2.48	<0.001	2.51	2.66	0.001
Investments	2.71	2.51	2.70	2.86	2.77	2.76	2.61	0.007	2.65	2.76	0.06
Employees	2.63	2.48	2.65	2.73	2.77	2.68	2.46	<0.001	2.58	2.68	0.02
e-Mobility	2.81	2.72	2.85	2.86	2.85	2.86	2.66	0.03	2.77	2.84	0.14

,

Table A3. Relevance to insurance purchase decision by age and gender.

		Age Cohort							Gender
Relevance to Insurance Purchase		<25	25–34	35–44	45–54	55–64	≥65	p Value	Women	Men	p Value
Nat Cat	2.58	2.58	2.80	2.74	2.61	2.46	2.22	<0.001	2.48	2.68	0.004
Footprint	2.59	2.39	2.63	2.77	2.74	2.63	2.35	<0.001	2.53	2.66	0.05
Claims Adjusting	2.58	2.51	2.83	2.70	2.63	2.56	2.18	<0.001	2.48	2.68	0.002
Pensions	2.51	2.28	2.56	2.64	2.60	2.49	2.44	0.05	2.35	2.67	<0.001
Investments	2.68	2.47	2.83	2.80	2.83	2.61	2.50	0.002	2.61	2.75	0.05
Employees	2.46	2.18	2.58	2.62	2.69	2.41	2.24	<0.001	2.33	2.60	<0.001
e-Mobility	3.06	2.97	3.26	3.14	3.09	3.05	2.83	0.03	3.11	3.01	0.19

and

Table A4. Link to sustainability by age and gender.

		Age Cohort							Gender
Link to Sustainability		<25	25–34	35–44	45–54	55–64	≥65	p Value	Women	Men	p Value
Nat Cat	2.41	2.42	2.51	2.50	2.48	2.34	2.15	<0.001	2.38	2.43	0.24
Footprint	2.46	2.39	2.43	2.52	2.55	2.47	2.38	0.22	2.41	2.50	0.06
Claims Adjusting	2.43	2.22	2.57	2.47	2.56	2.44	2.30	<0.001	2.38	2.48	0.03
Pensions	2.45	2.30	2.56	2.53	2.48	2.41	2.41	0.03	2.41	2.50	0.04
Investments	2.45	2.42	2.49	2.56	2.48	2.44	2.26	0.02	2.42	2.47	0.34
Employees	2.46	2.28	2.49	2.53	2.54	2.53	2.35	0.002	2.43	2.48	0.31
e-Mobility	2.65	2.47	2.74	2.64	2.75	2.66	2.63	0.04	2.64	2.66	0.71

). The dynamics of higher importance to younger and older age cohorts and lower importance to those in the middle hold consistent across all areas of engagement (Figure 8), and the same reasons are postulated.

A more detailed analysis by age cohort and area of engagement shows that there is a clear positive correlation between the perceived importance and both the perceived engagement of insurers and relevance to purchase. The perceived engagement of insurance providers in a particular area grows with the perceived importance of that topic, as shown in Figure 9a. This may be true due to insurers’ responsiveness to customer priorities or may be due to interested customers being better able to search for relevant information. Overall, customer priorities translate into relevance to insurance purchasing decisions (Figure 9b), showing consistent customer intended behavior.

Due to the clustering of responses by age cohort, we see that these insights hold true when summarizing over age cohorts or by gender (Figure 10a,b). While to some extent somewhat unsurprising, the insights gained for insurers are significant. First, the overall gender effect seen in Section 3.1 does not seem to hold when looking at individual areas of engagement in sustainability. Second, and perhaps most important, some aspects of current communication efforts seem to be effective and vindicated. While too few people overall can claim they understand what insurers are actually doing, the balance of communication around topics and customer groups seems to be accurate.

3.4. Impact of Insurance Company

The survey returned a rich dataset to investigate how the customer portfolios of different insurers view both sustainability overall and the efforts of their own insurer. The analysis based on Motor TPL and life policies revealed that there were very few statistically significant differences among these customer groups (Appendix A 

Table A5. Importance to customers by insurance company (anonymized).

Importance to Customers		A	B	C	D	E	F	G	H	I	Other	p Value
Nat Cat	2.15	2.35	2.13	2.10	2.28	2.10	2.13	1.99	2.18	2.20	2.13	0.29
Footprint	2.16	2.38	2.29	2.21	2.28	1.98	2.15	2.17	2.24	2.06	2.2	0.07
Claims Adjusting	2.23	2.46	2.20	2.14	2.30	2.29	2.17	2.23	2.24	2.23	2.20	0.66
Pensions	2.24	2.46	2.27	2.27	2.42	2.06	2.27	2.24	2.29	2.17	2.14	0.46
Investments	2.26	2.51	2.23	2.32	2.42	1.90	2.26	2.21	2.26	2.24	2.25	0.18
Employees	2.36	2.59	2.41	2.30	2.46	2.02	2.32	2.42	2.37	2.34	2.50	0.13
e-Mobility	2.73	2.99	2.96	2.49	2.82	2.41	2.67	2.75	2.62	2.75	2.69	0.09

,

Table A6. Engagement of own insurance company by company (anonymized).

Engagement of Own Insurer		A	B	C	D	E	F	G	H	I	Other	p Value
Nat Cat	2.68	2.76	2.79	2.83	2.76	2.80	2.41	2.63	2.78	2.63	2.76	<0.001
Footprint	2.66	2.81	2.68	2.73	2.66	2.69	2.41	2.71	2.76	2.63	2.80	<0.001
Claims Adjusting	2.77	2.80	2.80	3.11	2.76	2.74	2.56	2.78	2.80	2.79	2.91	0.01
Pensions	2.59	2.66	2.59	2.83	2.62	2.63	2.42	2.58	2.62	2.59	2.70	0.05
Investments	2.71	2.90	2.59	2.93	2.78	2.68	2.57	2.73	2.80	2.66	2.77	0.14
Employees	2.63	2.77	2.83	2.70	2.62	2.82	2.36	2.65	2.71	2.63	2.73	<0.001
e-Mobility	2.81	2.86	2.85	2.94	2.82	2.94	2.60	2.85	2.84	2.76	2.90	0.008

,

Table A7. Relevance to insurance purchase decision by insurance company (anonymized).

Relevance to Insurance Purchase		A	B	C	D	E	F	G	H	I	Other	p Value
Nat Cat	2.58	2.66	2.72	2.57	2.57	2.41	2.53	2.48	2.44	2.65	2.68	0.80
Footprint	2.59	2.78	2.69	2.63	2.76	2.16	2.51	2.68	2.75	2.48	2.74	0.09
Claims Adjusting	2.58	2.59	2.68	2.63	2.57	2.24	2.51	2.54	2.59	2.56	2.68	0.66
Pensions	2.51	2.66	2.55	2.52	2.64	2.33	2.48	2.62	2.47	2.44	2.49	0.82
Investments	2.68	2.86	2.78	2.60	2.89	1.96	2.66	2.67	2.84	2.66	2.73	0.02
Employees	2.46	2.68	2.59	2.67	2.58	2.18	2.33	2.44	2.50	2.42	2.39	0.21
e-Mobility	3.06	3.20	3.17	2.71	2.83	2.98	3.07	3.09	2.90	3.12	3.06	0.55

and

Table A8. Link to sustainability by insurance company (anonymized).

Link to Sustainability		A	B	C	D	E	F	G	H	I	Other	p Value
Nat Cat	2.41	2.59	2.48	2.33	2.63	2.37	2.34	2.34	2.35	2.38	2.43	0.02
Footprint	2.46	2.69	2.65	2.43	2.58	2.35	2.44	2.42	2.43	2.42	2.49	0.02
Claims Adjusting	2.43	2.53	2.49	2.33	2.59	2.16	2.37	2.47	2.37	2.45	2.48	0.29
Pensions	2.45	2.60	2.48	2.49	2.67	2.33	2.42	2.43	2.44	2.46	2.46	0.36
Investments	2.45	2.64	2.55	2.38	2.72	2.20	2.39	2.44	2.28	2.41	2.45	0.04
Employees	2.46	2.66	2.59	2.32	2.55	2.25	2.37	2.48	2.41	2.44	2.63	0.03
e-Mobility	2.65	2.77	2.80	2.71	2.74	2.53	2.59	2.64	2.66	2.65	2.65	0.76

). These results remain fundamentally unchanged when selecting a different line of business as the base for allocation to the portfolio of different insurers. Customers seem to have only minimally self-selected according to the engagement of their insurers with regards to sustainability, nor does there seem to be any company out- or under-performing in the market. Results in the other three dimensions were completely undifferentiated. Further, customers of different companies returned indistinguishable results overall, by age and gender, and by area of engagement. This result is consistent with similar studies on innovation in the Swiss insurance industry, especially technology-driven innovation [45,46], and point to a relatively high homogeneity in Swiss society and in the insurance industry, as well as to the relatively early stage of development of sustainable solutions in insurance. Respondents thus expressed the opinions of the overall insurance market rather than of different companies operating within it. This may be in part driven by the fact that more than 40% of respondents did not feel sufficiently informed to gauge their company’s engagement in sustainability, as discussed in Section 3.1.1. It may also be driven by the perceived lack of differentiation among companies. This interpretation is also consistent with previous studies [43].

4. Discussion

The insights gained in this study are significant both for industry practitioners and for academic researchers. For insurance practitioners, they are both encouraging and cause for concern in equal measures.

4.1. Practical Implications

More than 40% of respondents did not feel that they were able to gauge their insurer’s efforts in sustainability, in spite of significant communication and reporting efforts on this issue at corporate level. This is even more surprising considering the fundamental social role insurance plays in reducing the risk of poverty, and the proximity of the inter-temporal and inter-sectoral nature of both risk sharing and sustainability. It clearly indicates that the current efforts are in dire need of refocusing and retargeting to explain to customers what is being done and why, in an understandable manner at different customer touchpoints. In doing so, the messenger of this communication may in fact be at least as important as the message itself—i.e., if a retail customer’s trusted insurance advisor is not able to articulate his or her company’s sustainability engagement and why it is relevant, it seems unlikely that any corporate communication effort or sustainability report alone will make a significant difference in the eyes of the customers.

Customer groups especially interested in sustainability issues were able to find the information they needed to some extent. Customers especially value social issues, but environmental issues are also significant and hold a longer-term connection to the core business of risk transfer; therefore, they should not be unduly de-prioritized. On the other hand, the importance of sustainability to the customer’s next insurance purchase decision is limited. Less than 20% considered these issues very important; about half considered it important alongside price. This proportion is significantly reduced in the middle of the age distribution, with customers in the 35–54 age range less inclined to consider environmental issues in their decisions. The short-term implication is that Swiss insurers should continue to focus on providing good technical solutions at market prices for now. It is the authors’ opinion that this will change over time, especially as environmental issues will unfortunately become more prominent in the news.

Insurers in the future should pay more attention to sustainability in their core business, rather than concentrating on their investment portfolio or their own carbon/environmental footprint. Customers in particular feel that claims adjusting should be developed into a more sustainable platform. This is a very important message for insurers. Rather than concentrating on somewhat ancillary issues, as highlighted by [41], insurers should concentrate on the core process of claims and the vast network of providers they coordinate to carry out this function. Claims are at the core of insurance and account for more than 60% of premiums in the Swiss property and casualty business [47]. In addition, insurers can further emphasize their efforts to ensure equal employment conditions and career development opportunities. They should also re-evaluate their efforts to engage in and support e-mobility.

While differentiating among different goals and different areas of engagement, customers are not able to differentiate among different insurers. This is consistent across the expectations of their insurers, the evaluation of their performance, and the relevance of this information to their next insurance purchase. While somewhat frustrating for the companies that have engaged in several bona fide efforts, the results also indicate an early stage of development where customers have not yet self-selected into customer portfolios. This provides a market opportunity for diversification for insurers, and it is consistent with other results pointing to a high degree of homogeneity in the Swiss insurance market [45,46].

4.2. Contribution to Research

The theoretical contributions are equal in significance to those for industry practitioners. In general, our results confirm that women consider sustainability to be more important than men do [24,25,26]. On the other hand, this importance only translates into a weaker impact on actual insurance purchasing decisions. A similar effect is detectable across age cohorts, confirming the findings of the existing literature [6,28]. We found that younger customers pay more attention to environmental issues, as also demonstrated by [29,30]. However, the relationship with age is not linear and reverses for the older generations. The interpretation of this data is that older people are concerned about their legacy, and it would be interesting to test this hypothesis in future research. Across all areas of engagements and age cohorts, placing more importance on sustainability is linked to having a better understanding of insurers’ efforts in this area. This result is consistent with the existing research [26], and this in turn strengthens the interpretation that motivated customers will find the information and possibly evaluate it more positively, rather than being in support the ability of insurers to communicate more effectively with interested parties.

Customers are able to differentiate clearly between different services offered and link them to the core historical value proposition of the industry. Thus, customers tend to focus on the sustainability of core insurance processes, especially claims handling, as not sufficiently developed, confirming the results of [41]. Conversely, efforts by insurers in e-mobility do not impact purchasing decisions and are not considered important. The interpretation of these results is not that e-mobility is not important as a topic per se, but that it does not make sense for customers to discuss it in an insurance context. In addition, in our survey, we were not able to differentiate between insurance companies. Thus, the results present a picture of the overall Swiss insurance industry. A relevant hypothesis for future research is that the context of the survey implicitly informs the responses, and future studies of customer expectations need to consider their sector context in order to interpret the results accurately. These insights are largely consistent with the existing literature [48], but expanded to include the sector in its context.

It would be interesting to replicate the analysis in different countries and for different industries, to understand which results are spurious, which are specific to insurance, and which are robust across geographies and industries. To this end, we are running a parallel study in Singapore, with publication of the results forthcoming. In addition, the results of the current study suggest the potential for the development of an econometric model linking purchasing behavior to different factors. While some of the information collected in this study provides a good analytical base, developing such a model will require additional data to incorporate wealth, education level, and political orientation to capture other factors identified in the literature [26,28,30].