Improving trust levels in the insurance industry will be good for business, according to an expert.
Recent reports have found that trust in both brokers and the wider insurance industry is at low levels and Scott Ferguson, Australian insurance leader at
PwC, said that improving trust could help improve business.
In its recent Insurance Banana Skins report, PwC found that the Australian insurance industry has four public environment risks listed in its top 10 concerns, compared with just one in the global ranking.
Australia lists political interference, reputation, social change and regulation as key risks for the industry and Ferguson said that while these risks are found in the wider financial services industry, they are of particular note for the insurance sector.
“There is a real business reason to find ways to improve trust, and it can be done,” Ferguson told Insurance Business.
“Working in an untrusted sector, or a sector that is less trusted, can be expensive because you have to respond to extensive regulatory data requests, increased scrutiny, continual heavy focus of politicians through enquiries and it really does get in the way of your growth agenda and winning greater engagement with your customers.”
Ferguson said that the industry needs to be clear on its purpose for consumers and work proactively to ensure that promises are delivered on. Currently, Ferguson said industry stakeholders are working to simplify their offerings and operations to ensure that their products and services are more engaging for end users - and these initiatives could be key in winning back trust.
“If you are operating in a less trusted environment, in a way you are on the back foot,” Ferguson continued. “You have to respond to criticism rather than shaping more freely, your future.”
Ferguson said that while there is no doubt that the industry is trying to get on the front foot challenges remain politically and in terms of customer value.
“That is a hard proposition but it is one that the industry has to tackle,” he said.
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