People want different things, because they are different. That seems obvious. But it was underlined for me yesterday when I was talking with a group of advisers about cover levels. They were operating in a segment where $1m+ cover levels were common - they were surprised to discover that much of the market sells, typically, $200,000 of cover, and that still more segments exist.
Take another example. On Wednesday morning I spent three hours working on statements of advice. One adviser found that most clients accepted his recommendation as made. Another found that recommendations were always scaled.
Consider medical insurance. The major segments are no cover, employer-paid cover, and individual cover. But take the no-cover segment and split it up - there are people that don't want cover, want it but cannot afford it, want it but can no longer get it, and had it but had to let it go. Each has different views and needs.
The value of segmentation is that it allows us to understand why different people work in different ways, and have different views. Even within a segment there is room to accept that different solutions can exist. It is a valuable challenge to the over-simplification of 'there is only one right way to do this.'
Also, right now most insurers try to serve all the different segments with just one product, adding or deducting options. That may not be optimal.