Consumer satisfaction with insurance falls in latest public trust data
SME satisfaction moves in the opposite direction
New data published by the Chartered Insurance Institute (‘CII’) today (15 January 2025) reveal that consumers continue to believe that insurers could do more to build trust, particularly by focusing on loyalty.
Overall consumer satisfaction with insurers fell to 84% in the last quarter of 2024, down from 86% a year earlier. Within that number, just 14% reported being extremely satisfied, the lowest reported level since the Index began in 2019.
The key actions consumers said firms could take to build trust included:
- Offering discounts for customers who stay with the same company
- Recognising customer loyalty at renewal after a claim
- Ensuring premiums do not increase simply because a customer is no longer new
- Handling complaints in a professional and fair manner
- Providing additional benefits at renewal, such as enhanced coverage
On a more positive note, the Index shows that the gap between consumer expectations and perceived insurance firm performance around handling claims has improved for a fourth consecutive survey. Measures of consumer respect and speed of paying out have also continued to improve. However, these measures all remain above (worse than) their series lows, recorded in 2021.
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 rose to 82% (from 79%), slightly below older groups of consumers (see Table 1 & Chart 1).
The proportion of consumers using price comparison sites to purchase their insurance product increased by five percentage points since the last wave, to 44%.
SMEs reported more positive performance ratings compared to the previous wave, and overall satisfaction rose to 83%, equalling the previous series high reached in the last quarter of 2022. However, in contrast to the consumer research, SMEs say that improvements are required across a broader range of themes to increase their trust, including:
- Offering discounts for SMEs who stay with the same company
- Assessing SMEs’ risk individually, rather than using generic assumptions
- Answering SMEs’ questions quickly and clearly
- Taking loyalty into account when calculating renewal quotes following a claim
- Ensuring policy documents are easy to read with little or no small print
Reflecting on the numbers, CII Group Policy & Public Affairs Director, Dr Matt Connell, said: “The FCA’s Consumer Duty introduced the concept of ‘consumer support’. This made ‘sludge practices’, such as making customers wait a long time for a call to be answered or imposing a long-winded complaints process, a potential breach of the rules. The latest results of our Public Trust Index suggest there have been some improvements, but consumers continue to feel insurers could do better. It is apparent that insurers cannot allow customer service to be a poor relation in their operations.”
“It is also no surprise that the expectation gap around price rose as inflation went up. It has started to decrease since inflation has come back under control, but there is still a strong perception that insurers are not always pricing fairly.”
