Insurance Brands: Trust is Hard Won, Don’t Lose Consumer Confidence

Trust is a very hard won thing in business and for insurers it always comes down to claims. How are they handled, was the decision making process seen as being fair, offers of settlement what was expected and so on. Those who cheapskate out on write off values for example risk long term reputational damage. Thanks to the internet, it’s hard to keep that feedback from getting out so the best strategy is transparency and honest valuations when it comes to cover – and claims.

Here’s some analysis on consumer attitudes towards insurers.

Consumer trust in car insurance fell again in Autumn 2024, for the third consecutive quarter, as rising premiums and poor claims experiences continue to dent consumer confidence in the sector.

The Fairer Finance Trust in Insurance Index compiled from a study of 10,000 consumers, found that customers who distrusted their car insurer tended to be unhappy with price (-43% net satisfaction), value for money (-49%), and fees and charges (-47%).

The Index found a correlation between poor claims experience and lack of trust. Those who say they distrust their car insurer had a net satisfaction rate of -56% when it came to making a claim on their insurance in the last three years, compared to +91% of those who say they trust their insurer.

Which car insurers are most trusted?

Looking at larger insurers, with at least 300 responses over the last six waves of the Fairer Finance survey, the consumer group found that the most trusted insurer over the period was NFU Mutual, followed by Lloyds Bank and Saga. Among the least trusted insurers were 1^st Central, One Call Insurance, and Ageas.

Brands that compete more on price, such as 1^st Central, seem to have lower levels of trust than brands which are often chosen for their reputation, such as NFU Mutual.

This suggests that winning customers through price may not be the best route to building trust. As more insurers shift to price-competitive ‘essentials’ tier car insurance – which typically provide more cover than basic third-party, fire, and theft policies, but omit many features found in standard car insurance policies such as windscreen cover, stolen key replacement, courtesy cars, and the uninsured driver promise – trust in certain providers may suffer.

James Daley, Managing Director at Fairer Finance, the consumer group and ratings provider, commented: “The turmoil in the car insurance market over the past few years is continuing to take its toll on the reputation of the sector. Although rising prices are the biggest driver of consumer dissatisfaction, there’s also a growing number of customers getting a poor experience at claims stage – as insurers try to save on costs. Complaints to the Ombudsman have been rising and disappointingly, the percentage of cases being upheld in favour of the customer has also risen sharply.

“Although the car insurance sector is most under pressure, these problems are also being seen in other general insurance sectors. While it’s excellent news that the Government is launching a taskforce to look at the motor insurance market, it should widen the brief to take a look at the best ways to get the whole insurance sector working in customers’ best interests. As pricing becomes more sophisticated and more personalised, a growing number of consumers are getting poor outcomes. It’s time to take a step back and look at how to build a fairer market that provides affordable access to insurance for all consumers. This is a critical moment for the industry to take meaningful action and restore faith among policyholders.”

Travel insurance is still the least trusted sector

After a long period of improvement between 2017 and 2022 across the Fairer Finance Trust in Insurance Index—which tracks motor, home, travel, and pet insurance—trust began to level off and declined slightly over the last 18 months. Travel insurance is still the least trusted sector in general insurance, while pet insurance is the most trusted.

Household income and financial resilience

Across all sectors of general insurance, consumers with high incomes (£70k+) tend to have greater trust in their insurer than those on lower incomes. This may be because more affluent individuals can absorb higher premiums more easily and can potentially afford greater levels of cover which can result in a positive claims experience. Furthermore, their greater ability to pay, could mean they are opting for insurers that have a better track record for customer experience, boosting trust.

For more information about Fairer Finance and to read more about its Customer Experience and Product Ratings, visit https://www.fairerfinance.com/.