CII Public Trust Index highlights the biggest issue with insurance
August 21, 2018
The Chartered Insurance Institute (CII) recently launched a new Public trust index to demonstrate how the industry is performing. The paper highlighted some key concerns within the profession, including consumer's confidence and trust, allowing these growing issues to be realised and long-overdue action to be taken.
The research consisted of recording what consumers considered most valuable when buying insurance, and compared this how the same individuals perceived their insurers' performance. Accordingly, across all areas of research it was revealed that confidence was ranked as most important, with 74% of consumers valuing this. Interestingly though, when comparing expectation and perceived performance, confidence also had a sizeable gap of 7%. But, the biggest gap was rewarding customer loyalty at 13%.
This isn't surprising. The growth of comparison websites has meant that the technique of 'dual pricing' has come into the spotlight over recent years, with consumers now using the internet to get a better price as a new customer. On the other hand, existing customers often have their premiums set higher or increased annually-- this has decremented the confidence of long-time customers who feel that their loyalty is being taken advantage of. Rather than feeling appreciated, they instead feel like an opportunity to make profit. Clearly, it isn't enough just to be friendly, a term which is often coined as insincere in light of the profession's stereotypical behavior.
More needs to be done to address this. Offering discounts for loyalty will attract new and long-term customers, or matching another company's pricing could be an opportunity to rebuild trust and show appreciation. Over time, this should begin to make consumers feel less disposable and assure them that their insurer views them more as people rather than profit.
Dual pricing was not the only issue that the research paper highlighted. Some customers still lack confidence that the product they are purchasing will properly benefit their needs-- only 67% feel as though this need is appropriately met. In order to restore this trust, apt measures need to be taken. Better explanation of policies, being clearer about exclusions and amendments, and being committed to supporting customers, could all help to restore faith in insurance companies. Over time, these more considerate approaches will gain popularity and, as is always the case, others in the industry will have to catch up. In time, the stereotype of insurers being untrustworthy and misleading should begin to diminish, and in turn produce a more reliable industry.
You can read more on the issues discussed here in full, on the CII's press release:
http://www.cii.co.uk/media/9224252/public-trust-index-press-release.pdf
Sources:
http://www.cii.co.uk/media/9224255/opinion-survey-public-trust-in-insurance.pdf
http://www.cii.co.uk/media/9224252/public-trust-index-press-release.pdf
