Guidewire’s MD for EMEA says insurers have experienced a ‘rough journey’ during the pandemic, however ’the opportunities to remedy indifference, even negativity among customers, are very achievable’
More than a quarter (26%) of UK customers do not think the insurance industry did enough to help people in need amid the Covid-19 pandemic, according to Guidewire Software’s latest research, published today (22 June 2021).
This compares to 17% of UK customers who agreed with this statement in 2020, when the pandemic had just begun.
The software company’s 2021 attitudes study, called Love, Hate and Indifference, found that an ongoing lack of valued connection and engagement between insurers and their customers seemed to lie behind this low opinion, with almost one in three respondents believing that insurers sell overpriced products, are reluctant to pay out for claims, or that they provide a necessary but inconvenient service.
The proportion of customers who say their insurer understands them and that they value their products has flatlined at 15% year-on-year.
The research found that while insurers recognise the necessity to bridge this perception gap with their customers, often their efforts to support policyholders throughout the pandemic have not resulted in more positive consumer opinion.
For example, 11% of customers said they have received a refund on their policy, but 63% were unaware that refund deals even existed.
Overall, the research suggests that negative opinion has hardened about the apparent lack of support by insurers for their customers during the pandemic.
Keith Stonell, Guidewire’s managing director for Europe, Middle East and Africa (EMEA), said: “Like their customers, insurers have experienced a tough journey during the pandemic. This reaffirms how important it is for insurers to get closer to their customers and build on relationships that have been put under heavy pressure.
“The opportunities to remedy indifference, even negativity among customers, are very achievable and the development of truly useful alert services, more personalised consolidated products and usage-based policies offers insurers a proven path to engaging with their customers more effectively and sustainably.”
Insurers engaging with customers - ‘more work to do’
According to Guidewire, feedback from customers suggests ways that insurers could engage with them better:
- Alert services could bridge gap: Two-thirds (66%) of respondents said they would access a service from their insurer that sent warnings about issues to help prevent damage instead of just covering losses.
- Personalised, simplified insurance products hold real appeal: One in two (55%) respondents would be interested in consolidating their insurance policies and only dealing with one insurer that can cover all risks with one personalised insurance package. Even among those who think insurance is overpriced, this consolidation message has appeal for most (58%).
- Tap into pay-as-you-go: Usage-based insurance (UBI) could address customer negativity around value for money. While the study revealed there are few (9%) existing customers of UBI products, most respondents (60%) said they can see the value of UBI. The over 55s age group are particularly open to the concept (65%). Even 59% of customers who said they are deeply negative about insurers, warmed to UBI.
Lack of pandemic support
Guidewire’s study, which was conducted in April, surveyed 3,000 insurance consumers over the age of 18 across the UK, France and Germany. Respondents had taken out new general insurance policies, such as household or motor, or renewed a policy within the last 12 months.
The research further found that the customer demand for pandemic protection insurance in the UK has slumped - the demand for insurance against job losses, for example, has decreased from 20% in 2020 to 14% this year.
Insurance against sickness also dropped to 14%, down from 19%.
However, online identity theft protection was slightly up in 2021 at 14%, compared with 12% in 2020.