We all know insurance is price-driven, with many previous surveys revealing that the typical UK driver chooses the second or third cheapest quote, from a trusted – or well known – brand. But how about AI decision-making on pricing or claims settlements? Here’s some info from UserTesting;
New research conducted on behalf of UserTesting has revealed that for a majority (77%) of the British public, cost is the key factor in how they select their insurance providers.
The leading human insights provider conducted the study to understand the key challenges facing consumers when it comes to deciding who to insure with, and the process of signing up for new insurance.
Despite seven in ten respondents (68%) feeling confident they understand and can explain their current policy, 12% feel unable to do so. As of July 2023, the FCA’s new Consumer Duty increased the expectations on financial services providers to communicate with customers in language they understand. Yet despite this, lack of clarity about coverage details (28%) and overcomplicated claims processes (23%) were the leading challenges reported by respondents on their current insurance policy.
Almost a quarter (24%) of those surveyed would prefer to sit through the concert of a musician they don’t like in order to never have to understand an insurance policy or enrollment process again, while 18% would be willing to move back in with their parents, demonstrating how difficult the process is for many.
Commenting on the findings, Caroline Vize, Director and Research Consultant at UserTesting, said: “For many, insurance can feel like a stressful or confusing process. Providers are often engaging with customers when they’re making claims, which in itself means that they may be in an emotional state, and overcomplicated or unsympathetic processes only act to exacerbate this.
“Ensuring transparency and sensitivity across all documentation as well as in your communication with customers can help address any apprehension they may have and act to build a positive relationship and sense of trust which extends beyond cost.”
The public has hesitations about insurers embracing AI
As businesses across all sectors look to embrace AI as the next big technology breakthrough, public scepticism remains around its use case for the insurance industry with 89% of respondents stating they’d rather receive insurance advice from a human than AI, and almost a third (29%) unlikely to ever look to AI for insurance guidance in future.
For almost half of respondents (46%), privacy and data security concerns were the leading cause of concern, while the same amount (46%) stated they would miss the human touch and personal relationship offered by interacting with a person.
Despite the apprehension, over half of those surveyed (53%) reported they would be happy to use an insurance company that offers tailored policies, even if this required sharing personal information with a human agent or AI.
Caroline added: “While there may be a temptation to include AI in your offering, our survey has proven that consumers are still cautious with more than half broadly distrusting AI as a whole.
“Rather than rushing this process, it’s important that insurers take the time to understand how their customers feel about AI, and to investigate where it can make their processes more efficient rather than adding an unnecessary new element which could impact the user experience.”
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