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Just how confident are consumers in the insurance sector? The Chartered Insurance Institute (CII) is attempting to answer the question with the launch of its new Public Trust Index.
The index delves into research with insurers, regulators, public bodies, SMEs and, most importantly, consumers, examining what those buying insurance actually think is important and comparing that to their perception of insurers’ performance.
In its first index, the CII found that the main issue for consumers is the lack of perceived loyalty from their insurer – something chief executive Sian Fisher delved into as part of her most recent column with Insurance Business. Consumers are, it suggests, “fed up” with retail insurers offering cheaper deals to new customers than they are offered at renewal – a marketing technique known as “dual pricing.”
“The disparity between the pricing for new and existing customers in the personal lines market is eroding trust and we as a profession must work together to address this,” explained Fisher. “The research underlines the importance of the ABI and BIBA principles on maintaining fairness between new and existing customers when setting renewal premiums published in May, and we call on all insurers to implement these principles fully and wholeheartedly.”
As for buying insurance, customers want to feel confident that their insurer will provide good cover and settle claims quickly – confidence was ranked as the most important factor by those buying insurance at 74%, followed by ease of buying at 70% and good protection at 68%. However, within each of these areas there was a noticeable gap between expectations and performance with rewarding customer loyalty having the biggest gap at 13%, followed by protection at 7% and confidence in the insurer at 7%.
Meanwhile, price was seen as, perhaps surprisingly, being relatively unimportant. Having a claim settled quickly topped the list of importance at 76%, followed by having a claim handled respectfully at 71% and having control over how a claim is settled at 69%.
In addition, Fisher believes the report has offered guidance for insurers that consumers are looking for them to help mitigate the risks they face.
“Telematics has been successful at helping people improve their driving by providing instant feedback on each car journey and we want to work with insurers to do more like this with other products,” she said. “One area is home insurance, where ‘irreplaceable’ family photos could be protected against destruction through electronic storage. Insurers need to think creatively to help consumers get the most from their insurance and build trust.”
