Exploring consumer trust in insurers.

With costs still rising, customers are becoming more and more critical about where they spend their cash and on what. Insurance is one of life's bigger expenditures and usually comes hand in hand with other big purchases – such as buying a car or protecting a home – making it a real long-term investment for customers. 

Did you know? Just one in ten consumers trust their insurer.  

Even though insurance is crucial when protecting large investments, our research into brand loyalty shows only 13% of consumers trust their current preferred provider. And, only 8% have been loyal to their insurer for more than three years. The rise of price comparison sites is making it a tricky sector to achieve cut-through and long-term loyalty with customers. 

Our nationwide 1,000 consumer survey also revealed 42% are not loyal to their home, car or life/health insurance providers, just a 2% improvement on last year when 44% confirmed they weren’t loyal to their provider. This is despite new Financial Conduct Authority (FCA) regulation to protect loyal customers from paying more coming into play earlier this year.  

In January of this year, the FCA introduced new rules to tackle price walking and the act of continuously increasing prices for loyal customers across the home and motor insurance sectors. However, the current economic crisis in the UK makes it increasingly difficult for insurers to honour/reduce pricing on previous years – bad news for their customers. 

Brand switching is on the rise… 

The UK’s cost of living crisis is also leading to a rise in brand switching amongst consumers, with many expecting the brands they frequently purchase from to help ease this pressure. 

In fact:

• Close to one in five (17%) said brands absorbing some of the increasing costs throughout supply chains to help with the rising cost of living would improve their trust in insurers. 

• While 16% think brands should offer discounts at relevant places to help offset some of the rising cost of living. 

• And a further 14% said it would help if the brands they purchase from showcased they listen to/know their customers.   
   

Look, it’s no secret the insurance sector has long struggled with customer retention, and our last two pieces of research have cemented the fact that it's one of the worst performers on the customer loyalty front.  

But while things are slowly but surely heading in the right direction, there are more insurers could do to improve customer trust and eventually instil loyalty and retention. 

On the key factors influencing a consumer’s decision to stick with an insurance provider long-term, our data revealed these are the top areas of importance: 

1. Price (38%) 
2. Good customer service (19%) 
3. Reliability (17%) 
4. Trust (17%) 
5. Quality of product service (16%) 

Ranked in order, our research also revealed these were the best-performing sectors when it comes to customer loyalty – with the insurance sector remaining in the bottom four:  

1. Supermarkets 
2. Mobile provider 
3. Finance/banking 
4. Food services/restaurants 
5. Telecoms (landline, at-home broadband provider) 
6. Media (streaming services incl. TV, music, entertainment) 
7. Utilities (gas and electricity suppliers) 
8. Fashion retailers 
9. Insurers (home, car, life/health) 
10. Hotels/Hospitality 
11. Travel (airlines, trains) 
12. Leisure (gyms, cinemas) 

Driving customer connections during challenging times. 

What's more, just 5% feel a connection to their existing insurer and feel loyal to them, and only 8% believe their current insurer understands them as a customer. While close to one in ten (8%) would remain loyal if their existing insurer could help them save in other areas, such as dining out, food and drink, plus travel and leisure.  

Our research also shows almost one in five (17%) consumers have switched supermarkets to save on rising food prices, with a further 15% considering switching supermarkets in response to price increases. Close to a third (29%) also say their energy is now unaffordable.  

The statistics are incredibly concerning amongst even the best-performing sectors on the customer loyalty front. But there are ways providers can show they listen to the customers and ultimately understand their wants and needs. This is becoming more and more important in the current cost-conscious climate and will only help build trust – one of the greatest factors influencing a customer’s decision to stick with an insurer long-term. 

For more insights, download our ‘Driving customer connections during challenging times’ report here.