Falling premiums mask insurance industry's ongoing trust crisis

Consumer trust in insurance providers has shown a marginal improvement after more than two years of decline, according to the latest Trust in Insurance Index from Fairer Finance. However, the Autumn 2025 Index, which surveyed 10,000customers, reveals trust scores remain significantly below the peak recorded in Spring 2023, suggesting the industry has a long road ahead to rebuild customer relationships.

The modest uptick in trust appears largely driven by falling premiums rather than improved service, as insurance premiums dropped in 2025 following several years of sharp increases that eroded customer goodwill. Research shows that car insurance prices have fallen 16% in the past 12 months¹, with the recovery in confidence seemingly contingent on prices returning to sustainable levels.

Critically, customer switching behavior has fallen to record lows, with motor insurance switching dropping to just 33% – down from nearly 50% in 2024². This reduction suggests customers may be feeling trapped or exhausted by the comparison process rather than genuinely satisfied with their providers. Many consumers may have felt some relief to see a smaller increase, or even a reduction, in their premium at renewal – which hasn’t driven them to shop around and switch provider.

James Daley, Managing Director of consumer group Fairer Finance,

commented: “While we’ve seen a slight improvement in consumer trust in the general insurance market, we are still well below the levels we reached two years ago. More worryingly, claims satisfaction levels remain a long way below their pre- pandemic peak.

“As things stand, we are locked in a race to the bottom on quality. Insurance products are continuing to hollow out and the customer expectation gap is widening. The solution to this has to lie in supporting customers to better understand what they’re buying and what they’re not. Comparison sites need to work harder to match customers with policies that meet their needs, and to understand which insurers have a good track record at claims stage.”

Pet insurance continues to be the most trusted sector in general insurance, while travel insurance languishes as the least trusted. All four sectors – car, home, travel, and pet – saw marginal improvements in trust in Autumn 2025.

Car insurance trust leaders:

● NFU Mutual leads with a trust score of 79.46%

● Bell saw the biggest improvement, rising over 11 percentage points to 63.95%

● Among major insurers, Saga (60.99%) and AA (59.86%) remain the strongest

performers

● Customer happiness has edged up slightly to 59% in Autumn 2025, up from 58.5% in Spring 2025

Claims satisfaction still mediocre despite improvements

The research reveals that claims satisfaction, while improving, are still not close to the peaks seen in 2018/9. For car insurance, satisfaction has risen from a low of 54% in Spring 2024 to just 59% in Autumn 2025. This compares to 67% in 2018.

Claims satisfaction improved across all four major insurance sectors, with pet insurance seeing the biggest jump from 58.61% to 61.50%. NFU Mutual is the highest performing insurer for claims with a score of 78%. Among larger insurers, LV= leads for claims satisfaction in car insurance, while Sainsbury's tops pet insurance with a score of 72.70%.

The collapse in customer switching behaviour may help explain the modest claims improvements, as insurers may have belatedly recognised the need to improve retention through better claims handling rather than relying on customer inertia alone.

Price remains king – but claims experience matters

The Fairer Finance study found that price overwhelmingly dominates customer decision-making, with 29% choosing their insurance because it was cheapest on a comparison site, and 31% because it was the cheapest product on the market.

However, customers who have made a claim in the last three years show notably different behaviour – only 22% prioritise price alone, with reputation and recommendations becoming stronger drivers of choice once they've experienced how insurers actually perform when it matters.

Outside of price, loyalty plays a significant role, with 29% saying they chose their insurance product because they were an existing customer, and 13% because they used the provider for other products. The reputation of the brand also plays a significant role (23%).

Daley added: “The FCA is currently considering its response to Which?’s super-complaint into the home and travel insurance markets. It’s vital it acknowledges the problems that Which? has highlighted and takes this opportunity to reverse the race to the bottom on quality. It’s in everyone’s interests that we inject some real competition on quality and service into these markets – so we can rebuild trust and get back to a point where consumers understand and value insurance.”

For more information about Fairer Finance and to read more about its Customer Experience and Product Ratings, visit https://www.fairerfinance.com/.