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News from Members Consumers Across the World Trust Insurers Less Than Banks

Consumers Across the World Trust Insurers Less Than Banks

by EY December 4, 2014

Website www.ey.com

  • The level of consumer trust in insurers is just 70%, compared to 84% for supermarkets, 82% for banks, and 68% for pharmaceutical companies
  • 44% of consumers report no interactions with their insurer in the last 18 months
  •  Price matters – 50% of consumers change their insurer because of price point

The level of consumer trust in insurance companies is lagging at just 70%, compared to 82% for banks, largely because of the low frequency of contact insurers have with their customers, according to EY’s 2014 Global Consumer Insurance Survey, released today. Consumers indicate that they want more frequent, meaningful and personalized communications, but currently very few insurers are getting this right. In fact, 44% of consumers report no communication from their insurer in the last 18 months.

EY surveyed approximately 24,000 people in 30 countries between May and July 2014 to find out what matters most in the relationship customers have with their insurers, how they interact and how satisfied they are with the range of policy offerings.

Alina Dimitriu, Executive Director, EY Romania, states: "During the financial crisis trust in banks took a severe hit, but we have seen trust in banks recover while trust in insurers remains low. Banks have an established reason for regular interactions with their customers and, as a result, the ability to rebuild trust when it is lost. Insurers are relying on too few points of contact to build a trusted long-term relationship with their customers."

Trust in insurers is lagging, especially in mature markets
Globally, 70% of consumers trust insurance companies, which is lower than the levels of trust in supermarkets (84%), banking (82%), car manufacturing (80%) and online shopping sites (78%). In mature markets — such as Europe (61%) and Australia (53%) — there are even lower levels of trust, but consumers in developing markets such as Latin America (81%) and the Middle East and India (79%) have more trust in their insurer.

Consumers want more attention from their insurer
The survey found that the interactions between insurers and consumers currently occur so rarely that any one point of contact can significantly shift the perception of insurers and brokers in the consumer’s mind. When they do communicate the outcome is usually positive — globally, 70% of customers report a positive outcome from their interaction with insurers. 57% of people would prefer to hear from their insurer more than once a year and 56% of consumers report having to proactively contact their insurance company.

Alina Dimitriu adds: "These financial products do really matter at the end of the day, especially when customers have to call on them. Consumers want insurers to anticipate their key decision points for them and insurers need to recognize that just one point of contact at the right time can make a real difference. By delivering services beyond policies — such as timely information that promotes healthier living, safer driving or better financial outcomes — insurers have a real opportunity to transform consumer perceptions about the industry."

Very few in the industry are focusing on client communication
The ways in which insurers engage with consumers require significant attention. Consumers are far from delighted with outbound communications across all regions. Japanese consumers report the lowest level of satisfaction, with just 4% being highly satisfied. However, at the top end of the scale, insurers in North America and the UK are not performing that well either, with just 21% and 19% of their customer being highly satisfied respectively.

Digital and remote channels are fast reaching parity with traditional face-to-face channels. In fact, 80% of customers – including 44% of seniors – would consider any proposed channel rather than in-person for all types of transactions and inquiries.

Consumers still switch insurers based on price and want to know about promotions
Consumers’ decisions are still motivated largely by price and material benefits. While the frequency and relevance of communication is a reason given for closing or replacing a policy, it is actually fourth in the list of priorities for consumers, with less than 30% of consumers citing it as a top reason for changing a policy. The cost/terms of the policy is the biggest reason for people closing or replacing their policy, with more than half of consumers citing this as a top reason, followed closely by policy benefits or coverage, and less closely by a recommendation from a broker or friend.

This means that many customers who do switch insurers still retain overall positive views of their former provider – 38% of customers who were willing to recommend their provider to friends or relatives have closed their policy in the last 18 months.

"Insurers have traditionally devoted a lot of attention to new sales to new customers. Insurers have in the last few years started to devote more attention to retaining their existing customers. But the analysis suggests there is a third important group, ex-customers who left their insurer for a non-emotional reason (i.e., price point) and still hold them in high regard and who the insurer could win back", concludes Alina Dimitriu.

One way of winning customers back is perhaps through deals and promotions. Fifty-nine percent of global insurance consumers want to hear about promotions and special deals from their insurer more than once a year, but today, only 45% receive that level of contact. In global developing markets, the gap is even starker: 49% of consumers would prefer to receive information on promotions more than once a year, but just 29% of consumers receive this level of contact.

About the survey
To provide more insight into current consumer preferences and attitudes, EY surveyed approximately 24,000 people in 30 countries between May and July 2014 about their relationships with insurance providers. Building on the inaugural 2012 survey, this year’s survey focused on what matters most to consumers in these relationships, how they interact with their providers and how satisfied they are with a range of offerings from insurers. Along with EY’s 2013 Global Insurance Digital Survey and thought leadership concerning customer centricity, these findings present an overview of strategic opportunities and specific tactical choices insurers face in what many industry stakeholders recognize as a new, customer-driven era. For a copy of the report, go to ey.com/insurance.

About EY Romania
EY is one of the world's leading professional services firms with approximately 190,000 employees in 700 offices across 150 countries, and revenues of approximately $27.4 billion in the fiscal year that ended on 30 June 2014. Our network is the most integrated at global level and its vast resources allow us to help our clients benefit from every opportunity. In Romania, EY has been a leader on the professional services market since its set up in 1992. Our over 500 employees in Romania and Moldova provide seamless assurance, tax, transactions, and advisory services to clients ranging from multinationals to local companies. Our offices are based in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau. From 1 July 2013, Ernst & Young becomes EY, the logo has been modified in response to this change and the company's new tagline becomes "Building a better working world". The new visual identity reflects the new strategy of EY, Vision 2020. For more information, please visit www.ey.com.

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