Consumer Risk Index AN ANNUAL SURVEY OF THE RISKS AMERICANS BELIEVE ARE MOST PREVALENT IN THEIR LIVES

Consumer Risk Index AN ANNUAL SURVEY OF THE RISKS AMERICANS BELIEVE ARE MOST PREVALENT IN THEIR LIVES October 2014 Contents Executive summary 1 ...
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Consumer Risk Index AN ANNUAL SURVEY OF THE RISKS AMERICANS BELIEVE ARE MOST PREVALENT IN THEIR LIVES

October 2014

Contents Executive summary

1

Key findings

2

Top risks

3

Demographics and areas of concern

4

Distracted driving

6

Personal privacy issues/identity theft

7

Extreme weather

8

Managing risk

9

Preparing with insurance

10

About the survey

11

Executive summary Health, wealth and worry Thinking about their health, their money, the dangers of technology or even bad weather cause many Americans to worry. About one in four worries a great deal about these or other issues that can make the world seem like a risky place for consumers and their families. When they look ahead, two-thirds of Americans say the world is getting riskier, while only one in eight takes the opposite view. These are some of the findings of the second annual Travelers Consumer Risk Index, based on a July 2014 survey of more than 800 adult Americans. The index measures Americans’ general perceptions of risk in daily life. This report presents details about what topics worry Americans. It reveals information about who worries most, how concerns may differ by region and other facts about how Americans view the risks of life in today’s world. By identifying key trends and risks of greatest concern through the Travelers Consumer Risk Index, we hope to start a dialogue around how Americans can better prepare for the unexpected and lead safer lives.

PERCENTAGE OF PEOPLE WHO BELIEVE THE WORLD IS GETTING RISKIER

AMOUNT OF OVERALL RISK YOU/YOUR FAMILY FACES

12% 13%

26%

29% 14%

27%

29%

16%

63%

63%

21% 24% 34%

36%

23% 21%

53% 46% 21% 10%

25%

ALL ADULTS 2013

30%

ALL ADULTS 2014

22% 15%

5%

9% 4%

ALL ADULTS 2013

ALL ADULTS 2014

Very high risk

Low risk

Much more risky

Somewhat high risk

No risk

Somewhat more risky

Moderate risk

Not changing either way

13%

Somewhat less risky Much less risky

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Key findings Americans see a riskier world •

According to data released Oct. 1, 2014, 63% say they believe the world is becoming riskier when asked how the level of risk in the world is changing.



One in four respondents feels they and their family face high risk in today’s world.



Only one in eight people feels the world is becoming less risky.







Some risks reflect changes in modern life – identity theft, distracted driving and severe weather. Some risks stand the test of time – financial concerns topped the list with 65% of respondents saying they worry “a great deal” or “somewhat” about financial risks.

When it comes to some top concerns, there is a gap between people’s perception of risk overall and the chances of these risks happening to them directly.

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Top risks What makes Americans worry – and how much? To learn how Americans feel about the risks they see in the world, the Travelers Consumer Risk Index survey asked people to name issues about which they worry and to rate their level of worry or concern about specific topics.

Finances, personal privacy loss, health top the list Financial risk was listed as a top worry, with 65% of respondents saying they worry some or a great deal about money. Personal privacy loss/identity theft was second, with 61% saying they worry some or a great deal. Finally, 58% say they worry some or a great deal about health concerns.

Other major concerns When asked questions about specific concerns, the survey revealed: • •

Distracted driving – 85% express some or a lot of concern. Severe weather – 64% feel severe weather is occurring more frequently throughout the U.S., and one-third feel the frequency and severity of extreme weather in their area is making property damage more likely.

TOP RISKS AMERICANS WORRY ABOUT PERCENTAGE WHO WORRY A GREAT DEAL OR SOMEWHAT ABOUT THESE RISKS

WORRY A GREAT DEAL All adults 2014

All adults 2013

Financial concerns and risks

65%

27% 33%

68%

Risk of personal privacy loss/identity theft 61%

27% 34%

64%

Risk of serious health problem 58%

21% 25%

60%

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Demographics and areas of concern Worried: Who and where Who you are and where you live may reveal how you see risk in the world, both now and in the future. Adults over the age of 40 believe the world is getting riskier. So do residents of small towns and rural areas as well as people living in the South.

Distracted driving Distracted driving is seen as a major concern by 55% of those aged 40 to 69 and 58% of city and suburban dwellers.

Is the world becoming riskier? Nearly two-thirds of those surveyed – 63% – say yes, as well as 68% of those aged 40 to 69. One-third of millennials (defined in the survey as 18- to 34-year-olds) feel their overall risk level is low compared to older age groups. CHANGING LEVEL OF RISK YOU/YOUR FAMILY FACES

MUCH/SOMEWHAT MORE RISKY Age 18 to 39 55% Age 40 to 69 68%

27%

29% 63%

OVERALL DISTRACTED DRIVING RISK

63%

Non-college grads College grads

62% 66%

MUCH MORE RISKY Age 18 to 39 22% Age 40 to 69 31% 34%

Non-college grads College grads

36%

84% 52%

85% 54%

30% 23%

MAJOR CONCERN Age 18 to 39 52% Age 40 to 69 55% 21% 10%

22% 15%

5%

9% 4%

ALL ADULTS 2013

ALL ADULTS 2014

13%

Much more risky

Somewhat less risky

Somewhat more risky

Much less risky

32%

31%

11% 4%

10% 4%

ALL ADULTS 2013

City/suburbs Small town/rural

58% 49%

ALL ADULTS 2014

Major concern

Not much of a concern

Somewhat of a concern

Not a concern at all

Not changing either way

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Demographics and areas of concern (continued) Extreme weather

PERCEPTION OF SEVERE DAMAGING WEATHER EVENTS IN THE PAST FEW YEARS:

A majority – 55% – of residents of the Northeast believe severe and damaging weather events are becoming more frequent in their part of the country. Nearly half – 45% – of Midwest residents believe the same. Responses from the South and West, where winter was far less punishing, are well below those levels.

In the United States

In my local area

Becoming more frequent

Becoming less frequent

Personal privacy loss The loss of personal privacy is one of the top concerns for consumers, with 82% worrying about this risk. In fact, the same percentage of consumers surveyed worry about the loss of personal privacy as much as they do about the risk of a serious health problem.

Identity theft While still a significant worry, consumers seem to be less concerned about identity theft compared to a year ago. In this year’s survey, 23% report worrying a great deal about this risk compared to 31% last year, despite recent headlines about data breaches. In general, millennials are less concerned with computer and technology risks, as well as loss of personal privacy. About half – 53% – of millennials surveyed do not worry at all about computer and technology risks, compared to 34% of older age groups.

9%

8% 70%

3%

ALL ADULTS 2013

5% 64%

32%

39%

ALL ADULTS 2014

ALL ADULTS 2013

ALL ADULTS 2014

BECOMING MORE FREQUENT IN MY LOCAL AREA 2013 2014 Northeast 36% 55% South 39% 33% Midwest 30% 45% West 21% 28% Tornado Alley 38% 34% Hurricane zone 39% 42% Brush fire area 24% 29% Blizzard area 30% 48%

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Distracted driving The “other person” is the problem Many people – 89% – are concerned about getting into an accident involving another driver’s distracted driving. Asked if they fear that their own distraction by a mobile device or other technology would lead to trouble, 31% say it is a major concern or somewhat of a concern, 51% say they are not concerned at all, 17% say it is not too much of a concern and 1% say they are not sure.

DISTRACTED DRIVING RISK Major concern

Somewhat of a concern

Getting into an accident due to another driver’s distracted driving 47%

42%

89%

My 16- to 21-year-old getting into an accident because he/she is distracted

Younger drivers Parents are worried about their teen and young adult drivers using technology while behind the wheel. In fact, 69% say it is a major concern or somewhat of a concern. However, another 21% – one in five – express no concern at all, while 9% say it is not too much of a concern and 1% say they are not sure. There is an age divide between younger and older drivers when it comes to concern about technology behind the wheel. Drivers under the age of 40 are nearly twice as concerned about electronic distraction than those over 40.

Car versus pedestrian Drivers, technology and pedestrians are seen as a bad mix by 60% of respondents, especially those living in cities.

44%

25%

69%

Running into a pedestrian distracted by his/her mobile device or other technology 27%

33%

60%

Getting into an accident due to my own distraction with a mobile device or other technology 16%

15%

31%

MAJOR CONCERN City 33% Suburbs 21% Small town/rural 27%

MAJOR CONCERN Under age 40 23% Age 40/over 12%

DISTRACTED DRIVING AMONG HOUSEHOLDS WITH A 16- TO 21-YEAR-OLD Major concern

Somewhat of a concern

While driving, my getting into an automobile accident due to another driver’s distracted driving 39%

54%

93%

While driving, my 16- to 21-year-old getting into an accident because he/she is distracted by his/her mobile device or other technology* 28%

36%

64%

While driving, my accidentally running into a pedestrian distracted by his/her mobile device or other technology 40%

14%

54%

While driving, my getting into an automobile accident due to my own distraction with a mobile device or other technology 9%

18%

27%

*Among those who have a 16- to 21-year-old in the house

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Personal privacy issues/identity theft Computer troubles: Identity, privacy, hackers In addition to electronic distractions behind the wheel, our computerized society carries a number of other risks that cause a majority of Americans to worry. These risks include someone hacking into banking and financial accounts, losing personal privacy and the potential for identity theft. Identity theft is worrisome for nearly two-thirds of those surveyed, followed closely by hacking and privacy concerns. Losing stored data and information worries nearly half the respondents.

Millennial shift Members of the so-called millennial generation are less concerned about computer and technology risks and loss of personal privacy compared to older generations. In this age group, born in the 1980s to mid-1990s, 53% say they have no concern about these risks, compared with 34% in older age groups.

COMPUTER- AND TECHNOLOGY-RELATED RISK WORRY A GREAT DEAL All adults 2014

All adults 2013

WORRY GREAT DEAL/SOME

Someone hacking into my bank account/financial accounts 27%

55% 33%

64%

Losing my personal privacy 54%

24% 30%

61%

Potential for identity theft 63%

23% 31%

62%

Losing some or all of my stored data/information 13%

48% 18%

43%

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Extreme weather Local perception of severe weather

FREQUENCY OF SEVERE WEATHER EVENTS

In 2014, nearly two-thirds of Americans report that severe damaging weather events are becoming more frequent in the U.S., and 39% believe they are becoming more frequent in their local areas. This perception is strong in the Northeast and Midwest, which experienced a particularly long, cold and snowy winter in 2013-14.

2013

2014

Americans 55 and older are more likely than younger Americans to believe that severe weather events are occurring more frequently (71% versus 61%). BECOMING MORE FREQUENT IN MY LOCAL AREA 2013 2014 Northeast 36% 55% South 39% 33% Midwest 30% 45% West 21% 28%

Fear of damage About a third of people surveyed feel the changes in frequency and severity of weather are increasing the likelihood of damage to their property, homes and automobiles. This number is even higher in the Northeast. FEAR OF DAMAGE FROM EXTREME WEATHER Damage is more likely

70%

Damage is less likely

PROPERTY DAMAGE MORE LIKELY

30%

9%

ALL ADULTS 2013

34%

10%

Northeast South Midwest West

2013 29% 36% 33% 21%

2014 43% 34% 35% 24%

Tornado Alley Hurricane zone Brush fire area Blizzard area

38% 35% 26% 29%

39% 38% 26% 39%

64%

BECOMING MORE FREQUENT IN THE UNITED STATES

32%

39%

Tornado Alley Hurricane zone Brush fire area Blizzard area

38% 39% 24% 30%

34% 42% 29% 48%

BECOMING MORE FREQUENT IN MY LOCAL AREA

ALL ADULTS 2014

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Managing risk Anticipating the worst Anticipating a riskier world, a majority of Americans have plans to blunt the hazards they worry about – bad drivers, technological malice, severe weather and more.

Putting plans in place If bad weather threatens, 72% say they know what they will do before it strikes and 65% have a plan for the immediate aftermath. The South leads the way in planning, with 84% of respondents claiming to have a plan before weather strikes and 78% having a plan for after the storm. Those living in hurricane zones are also planners, with 79% having a pre-storm plan and 71% having plans for when the weather clears. About three in 10 Americans who do not have plans for before and after an extreme weather event would appreciate additional information to help them prepare.

Reducing common but serious risks Most Americans take steps to reduce common but potentially deadly hazards. According to the survey, 85% say they perform annual safety checks on their cars, while 82% say they are always on the alert for distracted drivers and pedestrians. In the home, 82% say they use carbon monoxide and smoke detectors; 64% also say they store food, water and flashlights to cope with bad weather or natural disaster. More people are installing and using burglar alarms as compared to 2013. RISK MITIGATION/PREPARATION STEPS TAKEN % who have done this activity 2014

2013

Annual car safety check: tires, parts, fluids, etc.

85% 84%

Install carbon monoxide and smoke detectors

I have a plan for what I should do BEFORE1

I have a plan for what I should do IMMEDIATELY FOLLOWING2

ALL ADULTS

72%

65%

NORTHEAST

74%

62%

SOUTH

84%

78%

MIDWEST

75%

64%

WEST

52%

51%

TORNADO ALLEY

71%

68%

HURRICANE ZONE

79%

71%

BRUSH FIRE AREA

57%

57%

BLIZZARD AREA

75%

65%

CITY

65%

57%

SUBURBS

71%

67%

SMALL TOWN/RURAL AREA

77%

69%

1

29% who don’t have a plan would appreciate information to help them prepare.

2

31% who don’t have a plan would appreciate information to help them prepare.

82% 83%

Always alert to distracted drivers/pedestrians 82% 78%

Store food/water/flashlights for extreme weather, natural disaster (+7 pts from last year)

64%

57%

Annual review of auto insurance coverage 55% 58%

Evacuation plan for extreme weather disaster 52% 52%

Install/use burglar alarm (+6 pts from last year)

40%

34%

Have home/apartment inspection for structural, electrical, physical risks 39% 40%

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Preparing with insurance Insurance is a key strategy Survey respondents were confident with their levels of coverage. Overall, 76% of respondents feel very confident about the insurance protection on their cars, while 69% feel very confident about the insurance on their homes or places they live.

CONFIDENCE WITH CURRENT COVERAGE Very confident

Somewhat confident

Not too confident

Frequent review of insurance needs To maintain that confidence, 64% of respondents say they review their personal risk and insurance needs at least once each year. Only 11% say they rarely if ever review their insurance needs. FREQUENCY OF EVALUATING PERSONAL RISK AND INSURANCE NEEDS Every six months or more often

Every three to five years

About once a year

Less often/never

Every two years

Not sure

3% 11% 20% 11% 64% 11%

69%

44%

76%

27%

4%

HOMEOWNERS RENTERS INSURANCE

21%

ONCE A YEAR OR MORE OFTEN Age 18-39 73% Age 40-54 57% Age 55-69 59%

3%

AUTO INSURANCE

| 10

About the survey From July 21 to July 28, 2014, Hart Research Associates conducted a telephone survey among 801 American consumers between the ages of 18 and 69 on the risks people face in daily life. This is the second annual survey of consumer risk, following a May 2013 survey of 806 Americans on these and related topics. The statistical margin of sampling error for the survey as a whole is ± 3.5 percentage points, and higher for smaller subsets of the total sample. Sampling error is just one form of error or bias that can affect survey results.

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