“Over the past years, policymakers, regulators and industry have made efforts to ensure that consumers receive valuable, well-designed and suitable insurance and pensions products and services…However, concerns remain and addressing them has become even more important in light of the effort to move towards a savings and investments union,” said Petra Hielkema, chair of Eiopa in a press statement on Wednesday 15 January 2025. Library photo: Adrian Petty / European Central Bank (2024)

“Over the past years, policymakers, regulators and industry have made efforts to ensure that consumers receive valuable, well-designed and suitable insurance and pensions products and services…However, concerns remain and addressing them has become even more important in light of the effort to move towards a savings and investments union,” said Petra Hielkema, chair of Eiopa in a press statement on Wednesday 15 January 2025. Library photo: Adrian Petty / European Central Bank (2024)

Over 50% of EU consumers believe their insurance or pension products fail to deliver value for money, highlighting persistent concerns despite increased digitalisation and AI improvements, said the European Insurance and Occupational Pensions Authority on Wednesday.

The European Insurance and Occupational Pensions Authority, in its 2024 consumer trends report, highlighted significant value for money concerns affecting the majority of EU consumers. These concerns are compounded by widening pension gaps and uneven benefits from the increasing use of digitalisation and artificial intelligence (AI). on 15 January 2025, the report also warns of emerging risks alongside declining pension adequacy across the EU.

Value for money

The report revealed persistent consumer concerns regarding value for money in both insurance and pension products. While 45% of EU consumers felt that their insurance-based investment products (IBIPs) provided good value, this figure rose slightly to 50% for personal pension products. Despite these figures, a significant portion of consumers still viewed these products as lacking in value, particularly those that were highly complex or lacked transparency.

The report also highlighted that high costs and product complexity led 15% of consumers to either refrain from purchasing or choose not to renew an IBIP. This figure rose to 19% for personal pension products. While the overall outlook for value for money risks remains stable, the report underscores the need to address emerging concerns in other areas as the insurance and pension landscape evolves.

Pension gap

Eiopa flagged the widening pension gap as a significant risk, with the average state pension in the EU expected to decline from 46.2% of earnings at retirement in 2019 to 37.5% by 2070. Only 42% of EU citizens expressed confidence in their ability to sustain a comfortable retirement. While supplementary pensions could help address this gap, participation remained low, with only 20% of consumers enrolled in occupational pension schemes and 18% owning personal pension products.

Barriers to adoption included limited financial resources (28%), difficulty finding suitable products (16%) and concerns over protecting invested sums (10%). Awareness and engagement with pension products were notably lower among women, highlighting a persistent gender disparity in pension participation.

Digitalisation

Digitalisation continued to reshape consumer interactions with insurance and pensions. Consumers increasingly utilised email (44%) and smartphone apps (18%) to access pension information, while traditional channels such as in-person (43%) and paper-based communication (14%) remained significant.

Digitalisation offered several advantages, including enhanced comparability via price comparison websites, faster claims processing through AI tools and simplified pension projections. However, the report also emphasised risks such as digital exclusion, the amplification of aggressive sales tactics through “dark patterns,” and poor decision-making influenced by AI-based systems. Approximately 16% of consumers encountered “limited-time offers,” while 15% reported exposure to misleading popularity claims in advertisements. 

Claims management

Claims management remained the leading source of consumer complaints in the insurance sector, particularly within motor third-party liability and travel insurance. Payment delays and inadequate pay-outs persisted, undermining consumer trust.

Despite these issues, the integration of AI-based tools showed promise. Over half (52%) of EU consumers noted that online automated processes had made claims handling faster and more efficient. AI applications such as image recognition tools enabled quicker repair decisions and cost estimates, though ethical and privacy considerations remained critical.

Additional developments

The report revealed a slight decline in access to investment and non-life insurance products from 2023 to 2024, driven by inflation and the challenging financial circumstances of many European households. Conversely, there was a growing interest in sustainability-focused insurance and pension products, with 16% of consumers considering such options in 2024, up from 13% in 2023. 

Cross-border insurance sales continued to rise, facilitated by digitalisation. However, trust issues and supervisory challenges posed obstacles, particularly for consumers wary of products sold from other countries.

Eiopa chair Petra Hielkema acknowledged improvements in areas such as value for money and governance but emphasised the need for continued efforts to address unresolved challenges, especially in the context of advancing the EU’s savings and investments union.

The 52-page full report is available .

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