Two independent studies commissioned by Wiraya, a managed service provider for mobile customer activation, have revealed that relationships between brands and consumers in the insurance market have deteriorated to the point of estrangement.
Providers are now assuming claims are twice as inflated as customers actually admit.
63% of respondents said price is now the sole factor most likely to make them change provider.
As relationships with insurance providers become more cost focused, customers are inflating claims against home, travel and vehicle insurance by 15%.
Intriguingly, professionals estimate the sums requested by customers are artificially increased by as much as 31%.
Branding and reputation
Brand recognition is a fundamental issue with the industry with 26% of respondents now confusing price comparison sites for actual insurers.
26% of consumers stated GoCompare as an insurance provider, 23% say the same of Compare the Market and 21% for MoneySupermarket.
Less than one in ten people are aware that British Gas provides home insurance suggesting that as brands diversify they need to increas their focus on brand awareness.
Delving into customer apathy around insurance reveals some stark results, with 53% of consumers now describing the relationship they have with a provider as ‘unrewarding’. Over a third (38%) of the UK has never made a claim with their insurance provider of any kind and 31% admit they don’t know what to do in the event they need to make a claim.
The brands carrying the most trust among consumers are now household names such as Tesco (23%) and John Lewis (25%). Traditional providers including Admiral and Hastings Direct were only chosen by 12% and 6% of respondents respectively.
Sam Madden, UK Director at Wiraya said: “The popularity of department stores and grocers for insurance is a reflection of how damaging price competition has become for insurance providers.
“The opportunity to win back trust is by looking beyond price to factors such as service, reputation and transparency, which are growing priorities for nearly a third (29%) of the people we spoke to.”
Call for change
The majority of consumers (69%) are confident the way insurance is taken out for home, contents, travel and vehicles will change over the next 10 years. Just 5% think insurance should carry on as is, this dips to 4% among professionals in the industry, of whom 14% are concerned insurance is now too stuck in its ways to ever change.
The good news is customers and insurance professionals are aligned on transparency.
55% of customers believe greater transparency in how premiums are constructed is essential in building a better perception of insurance providers, while 53% of insurance professionals feel greater transparency would also curb the tendency to inflate claims.
Additionally, 41% of customers identify better instruction on the claims process as another vital move in improving how insurers are perceived. 33% also feel more personalised thoughtful communications would help with a further 15% seeing a role for added services such as travel tips and security best practices.