Trust in the insurance industry has hit the lowest levels since
Which? started measuring it, as premiums skyrocket for millions
of people across the UK.
Which?’s monthly Consumer Insight Tracker found that trust in the
insurance industry has dropped to a confidence score of
-24.
Just a fifth (21%) of consumers said they trust insurance
companies to act in their best interest while almost half (44%)
said they do not. This is the lowest trust level recorded for the
sector since Which? began tracking trust in the insurance sector
in August 2020.
The consumer champion uncovered several reasons why trust in the
insurance industry may have plummeted, including rising premiums,
particularly for car insurance.
Confused.com said the cost of car insurance went up by almost 60
per cent in the year to October 2023. The average cost of a
comprehensive car insurance policy is now £924 - an increase of
£338 over last year.
Many customers question why their premiums have risen so
dramatically. One man from Yorkshire said: “I think insurance is
overpriced, and that prices have increased a lot over the last
year or so without any real reason.” It is unsurprising that a
lack of explanation for the premium rises may lead to many
distrusting the industry.
Many consumers who distrust the insurance industry also believe
firms are prioritising profit over customer welfare. One man aged
34-44 said: “Insurance companies go to great lengths to maximise
their profits and minimise the odds of having to pay out to
customers. It has nothing to do with protection and everything to
do with profit over the welfare of people.”
For others, their reasons for not trusting insurance companies to
act in their best interest came down to their personal
experiences or what they have heard from others about making a
claim.
A woman from the North East said: “I've had a really bad
experience in the past where they didn't have my best interests
at heart and [my claim] rumbled on for about 2 years”.
A man from Wales said: “Every time I have made a claim they have
always tried to find something to void the policy so they don't
have to pay out.”
Of 34 insurance types the Financial Conduct Authority (FCA)
publishes data on, standalone buildings and contents cover are
among the five products least likely to pay claims. During 2022,
some 99 per cent of car insurance claims were accepted – but this
figure was just 68 per cent for standalone buildings cover, which
covers life-changing events like fire or flood.
Earlier this year, the FCA, introduced a new Consumer Duty with a
set of higher and clearer standards of consumer protections which
require businesses to put their customers’ needs first.
Insurers need to ensure they are offering value for money and
support their customers’ understanding, including when they
need to make a claim. The FCA must monitor firms’ performance and
act swiftly against any firms that fall below the required
standards.
Anyone who feels they are being treated poorly by their insurer
should consider switching. Using customer surveys and expert
analysis, Which? has compiled guides on the best and worst car,
home and travel insurers so that consumers can choose a policy
that works for them with confidence.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“With insurance premiums continuing to soar and many consumers
reporting bad experiences with their insurer, it's hardly
surprising that trust in the industry has continued to
fall.
“Insurers need to ensure they are offering value for money and
that their customer service is up to scratch when you need to
make a claim. The FCA should not hesitate to take action against
any firms falling short.
“Anyone who isn’t happy with their current insurer should
consider switching or haggling. Our research shows the price
quoted by your insurer isn’t necessarily the best price available
and doing your research on comparison sites, haggling and
switching can offer savings.”
ENDS
Notes to editors
Which? cost of living campaign
The consumer champion is running a campaign calling on businesses
in essential sectors – supermarkets, telecoms and energy – to do
more to help their customers through the cost of living
crisis.
Consumer Insight Tracker
The Consumer Insight Tracker is an online poll conducted monthly
by Yonder Consulting on behalf of Which?. It is weighted to be
nationally representative with approximately 2,000 respondents
per wave.
Consumer trust in the insurance sector falls for the
second straight quarter
Source: Which? Consumer Insight Tracker, Online Poll
weighted to be nationally representative, approx 2,000
respondents per wave. Net trust is the proportion of consumers
who say they trust a sector to act in their best interest quite a
lot or a great deal minus the proportion who say they don’t trust
a sector very much or at all.
Which? tips on how to haggle effectively with your insurer
-
You should always check other deals on the market to know
whether or not what your insurer is offering you is the best
rate
-
Have a rival's rate and your rate to hand while on the
telephone to your insurer - this should contain this year's
deal and the previous price you were paying
