Research shows shocking lack of trust and understanding in the UK insurance industry
The UK insurance industry is on alert following ground-breaking new research revealing a shocking lack of trust and understanding among consumers.
The Claiming Loyalty study from Love2shop found just three in 10 UK adults (30%) trust their insurance provider.
Meanwhile, 35% of young adults, over 2.5 million people, admit they don’t understand how insurance works, while 45%, or 5.75 million people, avoid renewing policies because they find the process too difficult.
This compares to 12% of UK adults overall who avoid renewing their policies and 22% who don’t understand how insurance works.
According to the poll of 2,000 people, fine print and hidden clauses in policies are the most confusing element of insurance (47%), followed by jargon and complex terminology (39%).
Life (17%) is the most difficult type of insurance to understand, the research found, followed by home (14%), health (11%), travel (11%), and car (10%) insurance.
But it’s not all bad news for insurance providers, as the study shows it’s possible to regain trust among UK consumers – primarily through incentives.
Instant rewards are king, the figures show, with 82% of UK adults saying they would prefer to receive a cash reward over long-term incentives like movie or restaurant discounts.
When it comes to rewards, over a third of people (34%) say gift cards/vouchers would motivate them to stay with their insurance provider.
Instant rewards help attract as well as retain custom, the study reveals, with 83% of women and 80% of men admitting instant insurance incentives are a factor in their choice of provider.
Interestingly, the age groups arguably most reliant on insurance are those that are most reluctant to invest, the figures show, with over a quarter (27%) of people aged 25-65 admitting they would opt out of having insurance if they could.
The study also revealed some surprising behavioural trends, with a considerable 57% of UK drivers saying they would drive more safely if they earned cash rewards for taking their foot off the gas.
Frank Creighton, Director of Business Development at Love2shop, said: “Our research should serve as a stark warning to insurance providers that more needs to be done to earn the trust of customers.
“The study underscores the importance of instant rewards not only in attracting new customers but also in retaining existing ones. Over half of the survey respondents acknowledge that the immediate availability of insurance incentives influences their choice of provider.
“Going forward, it’s important for insurers to explore different ways to incentivise customers, with our data showing rewards, especially ones that can be granted instantly, are a key driver for customers when it comes to choosing a provider.
“At Love2shop, we already work with insurance providers, across a variety of specialist areas, to incentivise customers with gift cards.
“The results are overwhelmingly positive, with gift card rewards helping deliver improved customer loyalty, boosted customer satisfaction and increased retention rates.”
Download the full report for free at https://business.love2shop.co.uk/claiming-loyalty.
