Consumer satisfaction with insurers has fallen slightly to 84% in the last quarter of 2024, down from 86% a year earlier, according to data published today by the Chartered Insurance Institute (CII) today.
Within that number, a total of 14% reported being extremely satisfied, the lowest reported level since the Index began in 2019.
The data suggests consumers continue to believe that insurers could do more to build trust, particularly by focusing on loyalty.
A total of 1,000 consumers and 1,500 SME employees took part in the survey in March and August 2024.
The key actions consumers said firms could take to build trust included:
- Offering discounts for customers who stay with the same company
- Recognising customer loyalty at renewal after a claim
- Ensuring premiums do not increase simply because a customer is no longer new
- Handling complaints in a professional and fair manner
- Providing additional benefits at renewal, such as enhanced coverage
But the Index also showed that the gap between consumer expectations and perceived insurance firm performance around handling claims has improved for a fourth consecutive survey.
Measures of consumer respect and speed of paying out have also continued to improve.
However, these measures all remain above (worse than) their series lows, recorded in 2021.
The Index also looked at consumer responses by age, gender and ethnicity.
The proportion of respondents aged 18-34 who said they were satisfied with all forms of insurance policy that they had purchased recently rose to 82% (up from 79%), slightly below older groups of consumers.
And the proportion of consumers using price comparison sites to purchase their insurance product increased by five percentage points since the last wave, to 44%.
SMEs reported more positive performance ratings compared to the previous wave, and overall satisfaction rose to 83%, equalling the previous series high reached in the last quarter of 2022.
However, in contrast to the consumer research, SMEs say that improvements are required across a broader range of themes to increase their trust, including:
- Offering discounts for SMEs who stay with the same company
- Assessing SMEs’ risk individually, rather than using generic assumptions
- Answering SMEs’ questions quickly and clearly
- Taking loyalty into account when calculating renewal quotes following a claim
- Ensuring policy documents are easy to read with little or no small print
Dr Matt Connell, director for group policy and public affairs at CII, said: “The FCA’s Consumer Duty introduced the concept of ‘consumer support’.
“This made ‘sludge practices’, such as making customers wait a long time for a call to be answered or imposing a long-winded complaints process, a potential breach of the rules.
“The latest results of our Public Trust Index suggest there have been some improvements, but consumers continue to feel insurers could do better.
“It is apparent that insurers cannot allow customer service to be a poor relation in their operations.
“It is also no surprise that the expectation gap around price rose as inflation went up.
“It has started to decrease since inflation has come back under control, but there is still a strong perception that insurers are not always pricing fairly.”
Connell also said: “While it is possible to identify some improvements in the experiences of consumers in the recent past, many continue to feel that insurers could and should do better.
“In particular, respondents to our survey who had made a claim identified ‘speed’, ‘respect’ and ‘control’ as the three most significant areas that insurers should focus on to build greater trust with consumers.
“It is clear from these two sets of results that those insurers who demonstrate the highest standards of professionalism, doing more to educate and enhance the experience of consumers and providing fair outcomes, will strike a chord with a large potential customer base.”
