A third of consumers do not believe that insurers will pay their protection claim despite claims paid stats being published, according to the Association of Mortgage Intermediaries (AMI).
The disconnect is happening even as younger consumers express a preference for face-to-face contact when seeking advice.
“Nearly one in three consumers (30%) say neither percentage nor monetary based claims figures gives them reassurance that a protection claim would be paid,” AMI said in its fourth annual Viewpoint Report, titled The Perception Gap.
However, the study found younger people were typically more trusting of insurer claims statistics.
Two thirds (66%) of Gen Z aged up to 26, and 65% of Millennials aged 27 to 43, said they trusted claims data compared to just 44% of Gen X and 37% of Boomers.
Meanwhile, buying habits may be shifting among the younger generations, with this population showing greater preference for face-to-face communication than price comparison sites.
A total of one in three (31%) of all consumers said they would prefer to buy protection though a price comparison website, the most popular answer.
But younger generations were less likely to prefer this route with just 22% of Gen Z and 26% of Millennials wanting an online journey compared to older generations with 33% of Gen X aged 43 to 58 and 35% of Boomers choosing this approach.
Nearly one in four (24%) Gen Z consumers said they would prefer face-to-face, compared to 21% of all adults.
“All this highlights the importance of advice firms blending tech with the human touch,” the trade body said.
Positive perception of protection
Produced in partnership with Legal & General and Royal London, the report asked 3,000 UK adults and over 400 mortgage advisers their views on issues relating to the protection market, alongside qualitative research involving a bespoke community of consumers.
Robert Sinclair, CEO of AMI said: “In this year’s Viewpoint we particularly wanted to understand the behaviours and opinions of younger consumers – our industry’s future customers – and how they potentially differ from older generations.
“We’ve seen some positive indicators that present a reason for the industry to feel optimistic, including a higher proportion of Gen Z respondents viewing protection insurance as important compared to older consumers. However, there is work to be done to fully realise this potential.
“As part of this year’s Five Point Action Plan, we call on advice firms to assess whether it’s clear to consumers the role they play in the protection advice process and the value of good advice.
“Our recommendations also include actions for advisers, providers and AMI itself, as we all need to commit to making a difference if we are to fill the perception gap.”