28th March 2024
The latest findings from the Fairer Finance Trust in Insurance Index reveal that consumer trust in car insurance has experienced a notable decline in the last six months
The latest findings from the Fairer Finance Trust in Insurance Index reveal that consumer trust in car insurance has experienced a notable decline in the last six months, coinciding with a significant increase in premiums. The index, derived from a comprehensive poll of 10,000 consumers, indicates a shift in sentiment, with dissatisfaction mounting as premium costs soar.
New to the analysis since Autumn 2023, Fairer Finance has also tracked the sentiments of customers who have made claims on their policy in the last three years. It found that across car, home, and travel insurance, trust fell on average more among those who hadn't claimed on their policy (the majority of customers) compared to those who had, indicating that the claims process is not the key driver for declining trust.
When asked why they were dissatisfied with their insurer, on average the top three reasons cited were:
· Cost concerns: A significant 47% of dissatisfied customers highlight the cost of policies as their primary grievance
· Service shortcomings: Approximately 30% express dissatisfaction due to poor customer service experiences
· Provider issues: 28% of dissatisfied consumers cite issues with their insurance provider as a cause for discontent.
Furthermore, across all sectors, the proportion of unhappy customers naming price as the reason for dissatisfaction rose between the Autumn 2023 and Spring 2024 editions of the Index, from 39% to 47%. This may not be surprising given that the average quoted price of car insurance rose by 67.2% in the year to November 2023 – the highest annual increase on record1.
James Daley, Managing Director at Fairer Finance, the consumer group and ratings provider, commented: “The sharp rise in insurance prices is inevitably taking its toll on levels of customer trust in the sector. Household budgets have been under enormous pressure over the last two years, and just as there seemed to be some light at the end of the tunnel, the recent huge hikes in car insurance premiums have dealt another blow to cash strapped families.
“The industry’s response has been to try and keep premiums down by raising excesses and cutting cover levels, with more and more policies now coming without standard coverage such as windscreen and key cover. This is likely to lead to a growing expectation gap and deeper longer-term trust issues for consumers. In the is environment, it’s essential that insurers are doing everything they can to help customers understand what they’re buying – and what they’re not.”
Although the Index found that trust erosion is most pronounced in car insurance providers, trust in home insurers and travel insurers has also declined over the last six months. Pet insurance, now the most trusted sector on average, saw trust levels hold up slightly better despite price rises.
For more information about Fairer Finance and to read more about its Customer Experience and Product Ratings, visit https://www.fairerfinance.com/.
ENDS
Notes to editors
For further information, please contact:
Karen Mignon, KM Comms: karen@kmcomms.co.uk / +44 7766 651327
Louise Ahuja, KM Comms: louise@louisebcomms.co.uk/ +44 7788 676913
Every six months, Fairer Finance polls around 10,000 insurance customers via Opinium to ask them "Based on everything you know about this insurer, to what extent would you agree or disagree with the following statement - 'I trust [name of provider]'?". Respondents answer once for every type of insurance policy they're responsible for buying. The question has the following options: "strongly agree", "agree", "neither agree nor disagree", “disagree” and "strongly disagree". The trust index score is calculated using the following formula: ((% answering strongly agree x 2) + (% answering agree) + (% answering disagree x -1) + (% answering strongly disagree x -2))/ 2. We use this formula to subtract those who distrust a provider from those who trust them, to give additional weight to those answering strongly agree and strongly disagree, and to create a single score to compare sectors and track change over time.
The percentages for each Spring and Autumn period include responses for the last six waves of the survey. The surveys for car insurance, home insurance and travel insurance began in Spring 2015. The pet insurance survey began in Spring 2017. In the Spring 2024 edition of the Index, the responses have been weighted to give additional weight to more recent waves of the survey.
About Fairer Finance
Fairer Finance is an independent consumer group and ratings provider whose mission is to help create a financial services market that is fair for consumers as well as the companies that serve them. With a heritage spanning almost a decade, Fairer Finance’s unique and impartial Product Ratings are simply designed to help consumers make sense of the complex world of financial products. It rates over 6,000 products spanning over 20 sectors, ranging from bank accounts, credit cards, car insurance and travel insurance.
Its Customer Experience Ratings are designed to help consumers make more informed decisions based on quality and service and not just price (eg trust, complaint-handling, transparency etc).