Travel Insurance is Least Trusted Sector of General Insurance

Travel insurance providers are the least trusted in general insurance, reveals the new Fairer Finance Trust in Insurance Index, based on insights from a poll of 10,000 consumers.

Some of the smaller and specialist travel insurance brands such as insurefor.com, Leisure Guard, Puffin Insurance and Multitrip.com were ranked poorly by customers (at 25, 30, 30 and 30.7 respectively) languishing at the bottom of the table. Santander came out top in the current ratings by a high margin at 73.1, followed by M&S at 60.8, Post Office at 60.4, Saga at 59.2, and Aviva at 58.3. Santander – whose travel insurance is underwritten by global insurer Chubb - has topped the table in terms of customer trust since 2020 when it overtook the Post Office in the rankings.

Tracking consumers’ views twice yearly over the last six years, it is the only index that tracks levels of trust across home, car, travel and pet insurance. It has found that while consumer trust in all four sectors has risen across the board in the last six years, in more recent times (since 2020), travel insurance providers have proven to be the least trusted (50.9), lagging far behind the other insurance sectors (eg car insurance at 56.3), and rates lower today than even banking (60.6) and credit card providers (54).

Claim satisfaction levels were lowest among some of the same insurers ranked poorly for trust

The consumer group and ratings provider found that the number one reason for people being dissatisfied with their travel insurer is that they had ‘issues’ with the provider, followed by poor customer service, and the cost of the policy. Among those that have made an insurance claim, satisfaction relating to a claim experience fell across all sectors during the Covid pandemic. While all sectors have stabilised since, travel insurance fell the furthest.

James Daley, Managing Director at Fairer Finance commented: “Travel insurance is one of the most complex financial products – and also one of the cheapest. Most consumers struggle to understand the small print, and this leads to thousands of complaints and unhappy customers every year. The pandemic was a tipping point for the sector, with many more people finding they weren’t covered at a time they felt they needed their insurer the most. While trust in other insurance sectors has continued to grow, consumers are now relatively more wary of travel insurers. It’s crucial that the FCA works with the industry to close the expectation gap between what customers think they are buying – and what they actually get."

Travel insurers are doing relatively worse at the Financial Ombudsman Service since 2020

The period during which consumer trust in travel insurance has fallen behind the other sectors (2020-23) correlates with there being relatively more complaints upheld by the Financial Ombudsman Service (FOS) relating to travel insurance, many of them related to Covid.

In 2019-20, 33% of travel insurance complaints referred to the Ombudsman were upheld. In 2020-21, that figure rose to 38%. Though the absolute number of complaints relating to travel referred to the Ombudsman has fallen since 2021, in the last financial year (2022-23) the uphold rate was still stubbornly high at 36%. By comparison, the uphold rate for car and motorbike insurance complaints in 2022-23 was 30%, similar to the level recorded for those sectors in 2019-20, when the uphold rate was 27%.

Fairer Finance also found that insurers with very high levels of trust tend to have a higher proportion of customers who say their insurer has good customer service, a good reputation and a good level of cover, compared to the average for all insurers. Highly trusted insurers also tend to have fewer customers saying they chose the provider because it was the cheapest on a comparison site. Furthermore, when looking at claims’ satisfaction in travel insurance, Santander (76.3) also ranked number one and M&S at number three (69.6), correlating with their top positions relating to trust too.

How did other sectors fare?

Car and pet insurance have proven to be the most trusted sectors since 2020, followed by home insurance. For car insurance, Audi tops the table (84.2), followed by John Lewis and NFU Mutual (both 78.9), while in pet insurance Ageas (67.4) and PDSA (65.9) lead the way, and Ecclesiastical has the best rating (80.3) for home insurance, followed by NFU Mutual (69.7).

At the bottom of the table currently for customer trust is:

• Car insurance - Autonet (38.1) and Zenith (39.5)
• Home insurance – Homeprotect (37.4) and Budget (39.3)
• Pet Insurance - Waggel (37.2) and Perfect Pet (44.1)

Daley continued: “Our ratings are designed to help people make more informed decisions based on quality and service, and not just price. Tracking the views of over 10,000 consumers every six months, allows us to see which insurers and which sectors specifically are serving customers well and which are not. With Consumer Duty coming into effect in just a few weeks, those companies at the bottom of the trust tables need to urgently up their game.

“Although trust in insurance has been increasing in recent years, the Consumer Duty requires companies to raise their game to the next level. Insurers need to be able to prove they are working to deliver good customer outcomes and that their customers understand their products. Most insurers still have a lot of work to do to reach these new standards.”

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