New research from NTT DATA UK&I indicates that 82% of consumers have noticed no change in their interactions with insurance providers since the Consumer Duty Act took effect in the UK in July 2023.
This finding emerges as insurance firms prepare to demonstrate compliance with the Act at the first annual board reporting deadline on July 31, 2024, highlighting potential areas where the industry may need to improve.
The Consumer Duty Act was introduced to enhance customer care, but NTT DATA UK&I's research reveals mixed results. While 99% of consumers believe their insurance needs are met to some degree, 46% remain neutral or dissatisfied with their policies.
The study also found that 47% of insurers only contact their customers once a year, which may contribute to feelings of dissatisfaction. Additionally, 48% of consumers question whether their insurer acts in their best interests.
The survey also highlighted several other insights. Only 45% of consumers feel that communications from their providers are somewhat tailored, while 40% consider them generic, indicating a lack of personalised customer service.
A mere 28% of consumers have taken out new policies in the past six months, suggesting barriers to product uptake or a lack of appealing offerings. Concerns about artificial intelligence (AI) are present, with 17% worried about losing personal interaction and 18% doubting AI's capability to handle complex claims.
Meanwhile, 42% of consumers are willing to share more data for improved experiences, though 34% are hesitant about data sharing. Additionally, 29% of neurodivergent individuals find it difficult to obtain necessary policy information, compared to 18% of non-neurodivergent individuals.
The Consumer Duty Act aims to transform customer care in financial services by requiring firms to ensure positive outcomes for customers, that products and services meet their needs, and that benefits are delivered through fair and transparent practices. However, NTT DATA UK&I's survey of 2,000 UK consumers shows a disconnect between the regulatory goals and the experiences of policyholders.
Deborah Bale, head of general insurance & broking at NTT DATA UK&I, commented on the findings, noting that the research highlights a pivotal moment for the industry.
“The requirements outlined in the Consumer Duty Act require a conscious commitment, but they also offer an unprecedented opportunity to redefine what insurance means to consumers. The insurers who will lead the industry into its next chapter are those who can balance innovation with customer understanding. We're looking at a future where data-driven personalisation and AI aren't just buzzwords, but the bedrock of rebuilding consumer trust,” Bale said.
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