Insurance firms have been advised to move away from dual pricing between existing and new customers as research shows SMEs value loyalty most highly in their relationship with their insurance partner.
The report produced by the Chartered Insurance Institute (CII) New Generation Broking Group for 2018 to 2019 also revealed five key points that advisers should focus on to increase public trust. They were:
- Ensure clients understand why they need to purchase a particular product or level of cover.
- Change the focus of conversations from price and start with value.
- Be honest about what can and cannot be done.
- Show loyalty to customers.
- Demonstrate understanding of the customer and their needs.
Dual pricing and loyalty
Overall, the report’s findings show for smaller businesses with up to 20 employees that loyalty and confidence were the top two elements when working with an insurance partner followed by protection and price.
Meanwhile speed when claiming and loyalty ranked as the top two themes for firms with more than 20 employees.
The emphasis on loyalty was borne out through feelings around dual pricing of new vs existing customers, as the report highlighted moving away from dual pricing was key for businesses, with SMEs saying they would like to be rewarded for their loyalty, either via discounts or during renewal after they have claimed on a policy.
The New Generation group, made up of rising stars from the general insurance broking profession, said taking this action was vital to tackle the increased risk of policies being voided, cancelled, claims only partially paid or not paid at all, and previous payments even being recalled.
Natasha Hookings, member of the New Generation Broking Group, said: “Service is critical to building trust.
“This means the personal touch, building relationships and making contact with consumers, which should be supported by technology to understand their needs and deliver adequate solutions.
“The market must evolve technology so that an excellent service can be delivered. Both people and technology are key as systems must work efficiently and break down data to help us better understand our customers’ needs.”
Matt Connell, director of policy and public affairs at the CII, added: “The CII has long discussed the importance of trust and confidence in insurance.
“We believe both can be restored if professionals are crystal clear about what needs can be met by products and services.”