Citizens need the financial literacy skills to remain economically resilient
Financial education has a vital role to play in ensuring that European citizens are equipped with the knowledge, confidence and skills necessary to improve their understanding of financial products and concepts.
It is a core life skill that needs to be developed and nurtured as early as possible to encourage responsible financial behaviour and to engender the necessary confidence to take charge of one’s own financial future.
While education is a matter for national governments, Insurance Europe welcomes efforts at EU level to promote financial literacy. It was pleased to see that one of the actions in the European Commission's Capital Markets Union 2020 action plan focuses on empowering citizens through financial literacy. Insurance Europe is also looking forward to contributing to the joint project by the European Commission and the Organisation for Economic Co-operation and Development to develop a financial competence framework in the EU.
Insurance Europe and its member associations have long been actively engaged in efforts to raise levels of financial literacy, specifically in relation to risk awareness, insurance and long-term saving for retirement.
Since 2018, Insurance Europe's financial education activities are brought together in its “InsureWisely” campaign. The campaign material includes videos, a booklet and a series of infographic facsheets on different insurance topics with useful tips for consumers to for example reduce risks, choose the right policy and make a claim. This material is also used by Insurance Europe members in their national markets.
Boosting financial literacy: European insurance industry initiatives
The European insurance industry is engaged in numerous initiatives across Europe to increase financial literacy and the understanding of insurance in all parts of society, ranging from young children in schools to adults and professionals in the workplace, reflecting the industry’s belief that financial education should be a lifelong process.
A broad cross-section of the insurance industry’s many initiatives are showcased below.
Technological innovations are changing our lives faster than ever before. From consumer websites to mobile phones applications, there are now more ways to communicate with individuals about their finances. In terms of financial education, one of the great benefits of improved technological resources and tools is the potential to reach a wider section of the public, which can lead to higher levels of financial inclusion in the population as a whole. The European insurance industry uses digital channels to help consumers to take more responsibility for their financial decisions and find the insurance products that suit them best.
General consumer websites, mobile applications and advice services
Financial education can benefit all ages and income levels. In turn, it benefits the economy and society as a whole. It is important that individuals are equipped with a sound level of education on financial issues at all stages of life. The European insurance industry wants to empower consumers by providing them with independent information about insurance products.
The Association of Bulgarian Insurers (ABI) has a dedicated consumer section on its website. It includes materials on insurance basics and various types of insurance products.
ABI’s Facebook page „My Life” is consumers’ oriented and provides plain language information on various topics related to the insurance: insurance basics, insurance products, personal finance management.
In 2020 ABI launched online educational quiz “Your Insurance IQ”. The test consists of 15 questions. It combines the self-assessment and objective assessment of knowledge on basics of insurance and insurance products. The assessment is combined with education – additional information and explanation is provided for every question of the quiz.
Insurance & Pension Denmark operates an information service on its website called “Forsikringsoplysningen” (Ask about insurance). This service has been providing free and independent information about the most common life and non-life insurance products to the general public since the 1970s.
The website has, for example, a section for young people with Q&As about their specific insurance needs in different situations, such as starting to live on their own, travelling and studying abroad. It also includes a guide to making complaints. In addition to the information on the website, consumers can also ask advisors questions by phone or e-mail. The consumer phone line receives 6 000 general questions a year.
Insurance & Pension Denmark also has a Facebook page called “Forsikringsnørden” (Insurance geeks) since 2010, which provides general insurance information through posts and videos. The page is followed by over 2 500 people.
Launched in December 2014 by French insurers, “e-constat auto” is a mobile application meeting the expectation of consumers increasingly using mobile technologies in their daily lives. Downloadable free of charge from the Apple Store and Google Play, this application allows insureds to report their car accidents directly to their insurers through their smartphone, based on the model of the paper accident report. This application can be used in every case of accidents involving one or two motor vehicles, registered and insured in France or Monaco, which have only caused material damage. Thanks to its simplicity, promptness, reliability and universality, the e-constat auto allows a faster processing and settlement of claims.
"DIE VERSiCHERER" is a digital, customer-oriented campaign by the German Insurance Association (GDV). The website is aimed at insurance customers and their specific questions: Should I cancel my insurance? Which insurance premiums can I deduct from my taxes? The campaign relies on surprising and self-critical content to reduce consumer reservations and it has already won several PR and online awards. More information about the campaign can be found on the campaign website, Facebook and Instagram.
The Insurance Information Service (IIS) that is operated by Insurance Ireland, the Irish insurance association, has been providing general, jargon-free information about insurance to consumers since 1990. The IIS was set up to respond to public enquires about insurance policies and claims as well as to handle certain complaints. The IIS provides the information to consumers by phone and e-mail. Its services also include resolving cases under the Declined Cases Agreement, a statutory provision under which a person must be provided with a motor insurance quote if they have been previously declined by three insurers.
The IIS has proved very popular. In 2015, it received 12 589 queries, of which 1 303 were complaints. In addition to questions from consumers, the IIS also handles direct enquiries on consumer matters from organisations such as the National Consumer Agency, Citizens Information Board, government departments and the Central Bank.
Insurance Ireland’s website also offers consumer information through FAQs on different life and non-life insurance business lines and includes a glossary of insurance terms.
"Io & I Rischi" website and Facebook page
The website the “Io e i Rischi”is dedicated to the insurance educational program in schools, named “Io & i rischi”, promoted by the Forum ANIA-Consumatori (a non-profit foundation that includes several consumer associations).
The website provides an overview of the different aspects of the Io e i Rischi programme and offers materials and resources for teachers to develop their lesson plans. The website also publishes news related to other insurance-related projects promoted by the Forum: the “Gran Premio di Matematica Applicata” competition and the series of insurance booklets “L'Assicurazione in chiaro”.
In addition, the the Forum ANIA-Consumatori promotes its initiatives in education also through social networks, creating and managing two Facebook profiles dedicated to “Io & i Rischi” and the “Gran Premio di Matematica Applicata”.
Mobile phone application
The ANIA-Consumers Forum issued a mobile phone application, with the aim of raising citizens’ about the need to monitor their risk exposure areas and plan their protection strategies. Through the application users can check your level of financial knowledge and monitor the vulnerability degree of their family. The application is available in the app store and Google play.
The website “Van A tot Zekerheid” (From A to security) was set up by the Dutch Association of Insurers (VVN) in 2014 to provide independent consumer information in plain language. The information is arranged by life event, such as getting married, buying a house or travelling abroad, to make it easy for consumers to find the information they are looking for.
The “insurance in four steps” section encourages consumers to be critical and shop around before they buy a policy. The four steps covered are: shopping around, what to consider when buying a policy, making a claim, and amending or terminating a contract. The website also includes a glossary of terms and an option to ask questions via an online form.
In 2017 the Polish Insurance Association (PIU) launched a website dedicated to the report “How insurance changes Poland and its people”. The report is describing the impact of the insurance industry on people’s lives, on the economy and companies. Polish insurers provide two million Poles with access to health insurance, protect PLN 1.7 trillion worth of company assets and create 225,000 jobs. The PIU report is the first of its kind in Central and Eastern Europe. The report explains the role of insurers in social and economic life, shows how much depends on wise and efficient risk management. The English version of the report is available here.
In February 2018 the Polish Insurance Association also launched a project dedicated to helping consumers understand the idea of insurance. On a dedicated website consumers can find advice and answers to frequently asked questions.
The Konsumenternas Försäkringsbyrå (KFB), the Swedish Consumers’ Insurance Bureau, offers information on life insurance, non-life insurance and pension products. On its website, the KFB provides independent comparisons of products. The website received over two million visitors in 2019 and is supported by the Swedish Consumer Agency, the Swedish Financial Supervisory Authority and Insurance Sweden, the Swedish insurance association. Consumers can also contact the KFB by phone, e-mail or via social media to receive independent comparisons or get help with complaints and other insurance-related problems.
Fullmaktskollen.se is a service for managing powers of attorney relating to pensions and life assurance policies. Fullmaktskollen.se makes it easy for individuals and companies to get an overview of their powers of attorney and how long they will be valid. The service also allows users to sign powers of attorney and revoke them. It is provided free of charge for individuals and companies. Fullmaktskollen.se was established in 2016 by Insurance Sweden and the Swedish Insurance Brokers' Association.
In 2017 the UK’s Association of British Insurers launched a new website dedicated to helping consumers understand some of the details of general insurance. Called the “Insurance Experiments”, this campaign is built around a series of brief, humourous animations, each tackling a particular issue and backed up by a page of infographics. There was an intial focus on property insurance, given the evidence that consumers can face additional problems understanding what can be a complex product, with excesses, accidental damage and rebuild value among the topics covered. During 2018 the topics covered has been expanded to also include travel, pet and health products. The intention is that better informed consumers will spend more time thinking about the product they are buying, and therefore increase their chances of having a successful claim should they need to make one.
All the animations live on an unbranded website to encourage wider use across the industry and by a range of money advice organisations. The animations have been promoted during three separate campaign periods, on Facebook and Instagram, bringing in well over 3 million online impressions and attracting thousands of visitors to the website.
There’s also been a revamp of many of the consumer advice pages on the ABI’s website, such as the new-look travel insurance pages and a new advice series called Insurance Questions Answered, based on the most common google queries about insurance.
Comparison websites run by national insurance associations can play a key role in the delivery of impartial and independent information to consumers on insurance products and to help them purchase the policy that suits them best. In the Czech Republic, Denmark, Hungary, Norway and Sweden, the insurance industry has developed non-commercial and independent comparison tools to empower consumers by allowing them to compare products and make smarter product choices.
Insurance and Pension Denmark developed the Forsikringsguiden (Insurance Guide) website in 2016 in cooperation with consumer organisation Tænk. It helps consumers to choose the right insurance policy by providing them with a quick and easy comparison of insurance conditions and prices for the most common types of insurance. The website also aims to create transparency in the insurance market. 23 companies participate in the Forsikringsguiden, representing more than 90% of the Danish market.
Fakta om pension
Insurance and Pension Denmark also operates the “Fakta om pension” (Facts about pensions) website, which helps consumers to select the product type and provider most suited to them. It allows consumers to learn about different pension providers and the services they offer, as well as to compare elements of the most common products. The elements that users can compare include returns and costs, insurance cover, investment options and the level of service and advice for all pension companies. A new version was launched in 2015 with improved usability and new information on net returns and fees.
Online calculators can be a valuable tool to show people whether they are sufficiently covered by their insurance policy, what compensation they are entitled to or if they are saving sufficiently for their retirement. This transparency is key to creating awareness and empowering individuals to be able to make informed decisions and take more responsibility for their financial decisions. Calculators could also help people focus on their longer-term priorities and support them in planning ahead.
In contrast to other European countries, Germany does not have a pension tracking system regulated by the federal government or a lower-level authority. However, to illustrate the need to save for retirement the German Insurance Association (GDV) developed a pension calculator for its website. People can use the calculator to receive an estimate of their future pension benefits in less than 60 seconds.
Motor insurance: search engine car model and regional classification
The type of car and the region where the car will be insured are two of the numerous components considered by insurers when calculating motor insurance premiums. In a search engine on the GDV consumer portal "Die Versicherer" consumers can determine with just a few clicks how both their region and their car model are classified. The individual car model classification reflects how often the car model is responsible for accidents and how high the average (third-party) damage is. The regional classification is influenced by the driving behaviour of the drivers in the area. The lower the classification in the type and regional, the more favourably this affects the insurance premium.
The Spanish Insurers Association (UNESPA), and Tirea, an IT company for insurers, developed a free app in 2015 that enables consumers and other interested parties to find out what compensation they would receive for bodily injuries according to the Spanish injuries evaluation system for road-traffic accidents (Baremo). It is aimed at road-traffic victims, judges, lawyers, attorneys, doctors and others involved in the settlement of traffic accidents.
The software is compatible with mobile devices and personal computers and was downloaded 21 000 times since it was created. The application is available from Google Play, the App Store, the Chrome App Store and the UNESPA website.
Pension tracking tools
As individual responsibility becomes ever more vital, public awareness of the need to make adequate provision for retirement must be raised. Tracking services, which show individuals their entitlements accrued in the different pension pillars, can be a valuable tool in promoting the need for them to save. Showing someone what they can expect in retirement — and so clearly demonstrating their own potential pension gap — can encourage them to save more for their retirement.
Insurance and Pension Denmark has been running the secretariat of “PensionsInfo” since it was launched in 1999. This is a comprehensive online tracking tool allowing each Dane to access an overview of the pension and associated insurance entitlements from all their pension providers.
“PensionsInfo” provides consumers with an overview of their personal situation at retirement or in the case of early retirement (lost ability to work), critical illness or death. Through this service, pension providers can also flag dormant pension rights to individuals and prompt them to check whether it would be profitable to transfer the funds to a new scheme. “PensionsInfo” covers all three pension pillars.
According to consultants Towers Watson, “PensionsInfo” is “a testament to the collaboration and openness of the pensions industry in Denmark” and is “likely to increase consumers’ trust in the Danish pension market”.
“Norsk Pensjon” (Norwegian Pension) is an online tracking tool that provides consumers with an overview of the expected retirement value of various pension schemes. The tool, which was launched in 2006, collates information from private pensions, occupational pensions and public pension schemes.
Finance Norway, the financial services association, was one of the main initiators of this tracking tool. Norsk Pensjon is owned by seven life insurance companies and was developed in cooperation with the Social Security System (NAV). It has proved very popular with consumers, who are performing 3.4 million pension calculations every year.
Insurance Europe activities
In 2017 Insurance Europe produced a publication showcasing some of the many initiatives its member associations undertake. Called “Financial education in a digital age — initiatives by the European insurance industry”, the publication seeks to inspire those engaged in financial education and disseminate best practice. These and new examples can also be found on this webpage.
Since 2018, Insurance Europe's financial education activities are brought together in its “InsureWisely” campaign. The campaign material includes a booklet and a series of infographic facsheets on different insurance topics with useful tips for consumers to for example reduce risks, choose the right policy and make a claim. This material is also used by Insurance Europe members in their national markets.
European Platform for Financial Education
Global Money Week