Price comparison sites failing to meet consumer expectations
New data published by the Chartered Insurance Institute (‘CII’) today (8 July 2024) reveal that professional brokers are doing more to build consumer loyalty and confidence than price comparison sites, banks and building societies, or insurers themselves.
Overall, the CII’s Public Trust Index shows the gap between consumer expectations of how they will be treated by insurers and their actual experience is at its greatest since the survey began in 2019. The widening gap reflects the high importance consumers place on having their loyalty rewarded – such as not paying more than a new customer – yet reporting lower satisfaction with how insurers are performing in this respect. The difference between the two measures – the so-called ‘opportunity gap’ – has risen for a sixth consecutive survey and is now at +10.59, above its previous recorded peak of +10.35 in May 2020.
A similar pattern is evident in relation to consumer confidence. Survey respondents said insurers could be doing more to handle claims professionally, fairly and efficiently, and assess risks on an individual level. The ‘opportunity gap’ in relation to confidence has also risen to a series high, matching its previous peak of +8.44, again in May 2020.
In addition, consumers reported an erosion in their experiences of the performance of insurers in relation to their claims journeys compared to the previous survey. However, the importance they placed on these factors also declined in this latest survey, causing the associated opportunity gaps to narrow.
Breaking the numbers down, consumers who used price comparison sites to purchase their insurance policy reported the widest opportunity gaps with respect to loyalty (see diagram 1). In contrast, those who used a professional broker reported the narrowest gap.
The headline measure of consumer satisfaction fell by 1 percentage point, to 85%. The Index also looks 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 fell to 79% (from 82%) (diagram 2), significantly below other age groups. In contrast, those aged 55 and over reported greater satisfaction, rising from 87% to 88% (diagram 3).
Reflecting on the numbers, CII Group Policy & Public Affairs Director, Dr Matt Connell, said: “Insurers have done a great deal to comply with the FCA’s General Insurance pricing rules over recent years, but these latest data suggest consumers are yet to be convinced that they are benefitting. That said, consumers rated brokers’ performance as better than any other for buying insurance. The results underline the importance of interactive advice to consumer understanding. While some may see the services brokers offer as simply a cost to the consumer, it is clear from this evidence that if insurers want to achieve the highest levels of consumer understanding, a tailored explanation from an adviser is essential. The data indicate a similar story with respect to the speed of claims. As such, given the focus on the key Consumer Duty outcome of customer support, consumers who buy through a broker are much more likely to be impressed by the service they get.”
Diagram 2: 
Diagram 3: 