Sponsored content: Love2shop’s director of business development, Frank Creighton, explores why consumer trust in insurers is falling and how this can be rebuilt

Just three in 10 UK adults trust their insurance provider.

That’s one of the most stark findings of Love2shop’s Claiming Loyalty report – a nationwide poll of 2,000 UK adults that aimed to uncover people’s attitudes towards insurance providers and brokers.

The report revealed that consumers were no longer motivated to choose providers based on long-term rewards like movie deals. Instead, customers preferred to receive instant benefits like gift cards or reward programmes for lowering their risk – for example, through safe driving or healthy living habits.

So, what’s going on?

Empowered customers

Recent years have seen consumers become much more confident in calling out businesses and sectors they feel are not delivering for them. So, how did insurance end up in this category?

Frank headshot, Love2shop

Frank Creighton

The rising cost of living has accelerated the trend that people no longer see value in typical insurance ‘benefits’.

In Love2shop’s study, 82% of people said they would prefer an instant reward over a year of discounted movie tickets or dining out offers.

While such offers are great in ads, they don’t actually motivate people to sign up. People really want instant rewards – something they receive as a thank you for taking out a policy that gives them an immediate, meaningful benefit.

That includes rewards they can use to ease the cost of their everyday spending, or put towards a rare indulgence without having to use their own money.

Trust issues

The insurance sector is based on the protection of individuals’ most precious possessions – even life and health – so customers’ falling trust in insurers is a major red flag.

The Claiming Loyalty report found that people want to trust insurers, but the market is not designed to encourage that.

By creating an environment where customers only get good deals by switching providers, the insurance sector has eroded trust in itself as a custodian of precious assets.

Constantly switching between providers that fail to engage with consumers is devaluing the service insurers provide. That’s why an estimated one million drivers, seven million homes and 91% of pet owners do not have insurance in the UK.

In fact, 32% of people polled by Love2shop said they would not have any type of insurance given the choice.

Insurers need to rebuild their relationship with customers and restore the sense of value and protection having a policy offers, rather than being seen as just another expense.

Relationship building

One of the key things Love2shop’s report found was that despite being driven to switch provider for the best deals, insurance customers are willing to remain loyal to an insurer that engages with them.

It makes sense that people want to entrust the protection of their most precious assets – and even their lives – to a provider they feel knows and values them.

The report showed that 34% of respondents would be loyal to a provider that offered genuine, regular rewards.

Meanwhile 36% of those surveyed said that a programme which rewarded risk reducing behaviour, like living healthily or driving carefully, would not only attract their custom, but it would increase their chances of remaining loyal to that provider.

Offering rewards and recognition is the first major step to rebuilding trust. Giving rewards that really make a difference to consumers shows them that they matter.

Demonstrating that insurance gives something back, beyond paying out in a crisis, is powerful. It opens up the opportunity to truly engage with customers through open communication and regular rewards.

Get the strategy right and loyalty could well replace switching providers as the norm in the insurance marketplace.

Download the full Claiming Loyalty report for free here.