The new Index will reveal where people are confident with the industry and where it can be improved

The Chartered Insurance Institute (CII) is launching its ‘Public Trust Index’, designed to measure consumer confidence in insurance.

Based on research with consumers, SMEs, insurers, regulators and public bodies, the index will reveal where people are confident in the insurance profession and areas for improvement.

First issue

This first Index indicates that the number one issue for consumers is the perceived lack of loyalty from their insurer, this is where researchers found the biggest gap between consumers’ expectations and insurer performance.

Consumers are fed up with retail insurers offering cheaper premiums to new customers than they are offered at renewal, also known as dual pricing, which has had a turbulent reputation in the last few years.

When it comes to buying insurance, consumers want to feel confident in their insurer, that they will provide good cover and settle claims quickly.

Across all areas of the research, confidence was ranked as most important by those buying insurance (74%), followed by an easy buying process (70%) and good protection in the insurance product (68%).

Yet on each of these points, there was a sizeable gap between the customers’ expectations and the perceived performance of insurers, rewarding customer loyalty had the biggest gap at 13%, followed by protection (level of cover in the product) 7% and confidence in the insurer (7%).

Sian Fisher, chief executive of the CII, said: “This first Index highlights how the insurance profession is performing and areas for improvement.

”Insurers are doing an excellent job when it comes to settling claims and keeping people protected, which flies in the face of some of the popular cynicism towards insurance. However, the disparity between the pricing for new and existing customers in the personal lines market is eroding trust and we as a profession must work together to address this.

”The research underlines the importance of the ABI and Biba principles on maintaining fairness between new and existing customers when setting renewal premiums published in May, and we call on all insurers to implement these principles fully and wholeheartedly.

“We also believe there is a real opportunity for insurers to help their customers mitigate the risks they face.

”Telematics has been successful at helping people improve their driving by providing instant feedback on each car journey and we want to work with insurers to do more like this with other products. One area is home insurance, where ‘irreplaceable’ family photos could be protected against destruction through electronic storage. Insurers need to think creatively to help consumers get the most from their insurance and build trust.”