Insights — August 3, 2023

Study: We’re Anxious but Optimistic: What these 12 people want insurance companies to know about their finances

by Emily Smith Cardineau

12 illustrated faces of varying sizes on an orange background

With near record-high inflation, ballooning interest rates, rumblings of layoffs, and a recession that may or may not be looming, there are plenty of good reasons for Americans to be worried about money. Yet, when Cake & Arrow spoke with 12 working-aged adults across America about their finances a remarkable sense of optimism prevailed. Unanimously, all 12 people expressed a bright outlook for their financial future, even as anxieties about The Future — the political future, the economic future, the ecological future — hovered in the background. In this study, Cake & Arrow asks participants: does insurance help to allay these anxieties? Their answer: Kind of.

The study, featuring 12 as told-to stories based on hour-long interviews with participants, found that the prevailing optimism about the future was grounded less in people’s faith in institutions (the government, the market, the insurance industry) and more in their own disciplined financial habits, which many are cultivating as a bulwark against uncertainty. In fact, for many of the people interviewed for this study, the value of insurance is quickly eroding, as premiums are on the rise along with uncertainty about the future; even those who tend to see insurance as an integral aspect of their financial stability are doing a cost-benefit analysis, and beginning to question its promise of protection.

“For decades, the insurance industry, particularly P&C, have taken for granted that their products are required,” said Josh Levine, Cake & Arrow founder and CEO. “But as auto and home premiums double or triple, and insurers pull out of riskier markets, the cost of insurance may be reaching a tipping point, making it truly unaffordable for some and not worth the expense for others.

This, he explained, can lead to people seeking out not only alternative forms of protection and pooling risk, but also new ways of living that anticipate and mitigate risks.

“If what we learned from people in this study is any indication, I believe the industry may be at a critical juncture. The question now is whether it will rise to the occasion, and approach this shift as an opportunity and not a threat. Only time will tell.”

To learn more, read the stories of the 12 people we talked to:

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