H O T T OHP OI CT : TPOUPBI LC I C– TMROUTSOTR I N D E X
overly disadvantage existing customers over new ones. Despite the inﬂuence of consumer groups and wider regulatory pressures encouraging the use of price comparison websites to keep insurance companies ‘on their toes’, our research demonstrates that price in fact is not as important to consumers as one might assume, and an over-ﬁxation on price (rather than value) has gone some way to erode the insurer-consumer relationship. Consumers want to stay with the same insurer, but don’t believe their insurer does enough to recognise or value their loyalty. On the contrary, many feel as though their loyalty is being punished or exploited. So according to our research it is the effectiveness with which the profession tackles the broken system of dual pricing - the policy of charging excessive differences between new customer premium pricess and that at renewal for long standing nding customers - where the biggest gest opportunity to build trust in insurance urance lies at present. It is up to insurers to o recognise and reciprocate their customer’s tomer’s loyalty for relationships to feel genuine. nuine.
CLAIMS – A SUCCESS STORY There are also areas of importance tance to the customer where insurerss are performing well which deserve rve recognition. The profession rises to o the different challenges posed by what to the customer is the ‘moment of truth’, ’, to pay out on a claim when conditions of a policy have been met. The conundrum inherent in the very nature of insurance is that it is those who have been through the claims process that have a more favourable opinion of their insurer - yet the majority of the public do not have personal experience of reaching this stage where insurers are able to evidence their competence. Insurance products are rarely ‘used’ in the way that retail banking is used for example, so it must be remembered that the main interaction consumers have with insurance providers is one-way: paying for a mostly invisible beneﬁt. Opinions are instead often informed by damaging experiences at renewal, which is where the insurance
‘experience’ is currently weakest in the eyes of consumer. This signiﬁcant group within society - the consumers of insurance products that haven’t claimed on a policy -offer another clear opportunity to build trust.
CREATIVITY PAYS OFF The theme of ‘Relationship’ is considered an area where insurance providers do not match customer expectations, and yet according to our analysis there is no desire on the part of the customer to become best friends with their insurer, so achieving the level of brand identiﬁcation that other retail sectors might enjoy is unlikely.
IT IS UP TO INSURERS TO RECOGNISE AND RECIPROCATE THEIR CUSTOMERS’ LOYALTY FOR RELATIONSHIPS TO FEEL GENUINE
This in part explains why consumers do not consider ‘Relationship’ to be as important when compared with other themes, but ‘Conﬁdence’ or a certainty that they are covered for what they really seek and know extras will be beneﬁcial to their needs – or in other words, to have the peace of mind that they are paying for a service provided by professionals, is indeed critical.
Consumers desire information from their insurer that provides them with an additional sense of safety and security - which doesn’t have a price - on top of the policy they have bought, as well as guidance on how to avoid losing what is considered irreplaceable. This is where creativity on the part of the provider can really pay off in building trust, and why product innovations such as the use of telematics in providing instant feedback to improve driver behaviour and therefore lower premiums are becoming increasingly popular, and help combat the perception that insurers are only acting in self-interest.
NO ‘ONE OFF’ The CII’s Public Trust Index is not going to be a one-off project that disappears after generating a few headlines. As we have committed to conducting this research on an annual basis, its real value will emerge when we are able to demonstrate how the response of the profession to the key opportunities to build trust has improved customer sentiment, and im how these opportunities shift year on year. We will be talking to members year over the th next few months about how they mig might be able to use the insights we have co collected to align themselves much more closely around customers by focusing ef efforts and investment on improving th the experience in the areas where iit matters to them. This is a nuanced conversation with the public nu too, involving an acknowledgement of where the profession is performing well, as in the case of the ease with which an insurance products can now be transacted. But at present there is clearly a necessity for insurers to review this structural focus on price, rather than value, that has resulted in the unintended consequence of punishing customer loyalty. This voluntary action would be more powerful than any new directive from a regulatory body, but ﬁrms will not be able to do this on their own. Trust can only be built together through galvanising a united profession, and as the sector’s major professional body in the public interest the CII is ideally placed to lead this initiative. ●
thejournal.cii.co.uk / The Journal / June - July 2018
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