Research: Brokers say technology hasn't improved trading with insurers

In total, 70 completed the questionnaire and the findings presented some intriguing and, in some cases, surprising conclusions – not least about where the market is in terms of adopting and making a success of digital.

Asked whether insurers were easier or harder to do business with today compared to two years ago, only 18.6% of people thought they were easier or much easier to trade with. By contrast, 51.4% said they were harder or much harder to work with.

Asked specifically about the role of technology in this relationship, only 31.4% agreed this had made insurers either easier or much easier to do business with; a similar proportion to those who thought it had made it harder or much harder (28.6%).

Most brokers (40%) thought technology had had no impact on how they trade with insurers, which  – coupled with the number who thought it had hampered them – seems to be counterintuitive, given the investment insurers are making in portals and e-trading platforms.

However, it could be an indication that for all the talk of the digital movement, and it upgrading customer interactions, brokers might not be seeing the same improvements as individual consumers, in relation to the interface between themselves and providers.

By way of contrast, when asked how insurance as a sector stacks up against banking and other parts of the financial services in terms using technology, 23% and 25.4% respectively thought it was already on par. However, 27.1% and 26.2% said it was two to three years behind; 16.9% and 16.4% went further and responded that it was four to five years behind.

The adoption of digital and technology have been seen as a silver bullet in breaking down some of the long-standing issues that exist in terms of transparency and making sure policyholders understand what they are buying. And that is as relevant in the intermediated market as the direct one.

It was no surprise that in our survey, claims came top in terms of customer complaints about insurers, given it is the moment of truth when the value of the product becomes clear.  

Indeed, with a score of 91 points, claims came way out in front of the second and third answers – too expensive (67 points) and not responsive enough (53 points).

Too much jargon (19 points) and transparency of cover (8 points) came seventh and eleventh on the list, which I found a little surprising, but would suggest they are very much root causes of the complaints over claims, and thus important issues to tackle despite their low ranking.

Indeed, I would surmise that should these be made a higher priority, the claims score would fall significantly because policyholder expectations would better match the reality of what they bought. They wouldn’t think they have bought a Rolls Royce after purchasing something closer to a Ford Fiesta.

And don’t get me wrong. There is nothing wrong with these vehicles, it is just that while Ford Fiesta drivers are under no illusion what they own, when it comes to insurance, many people only find out what they have is not roadworthy further down the track.

The brokers we polled believed a lack of customer understanding about what was covered was relevant in 68.9% of cases of underinsurance or overinsurance, underlining the work the market has to do to get all policyholders in tune with the reality of what they have bought. Making products simpler and removing jargon are two quick wins to achieve this objective.