Editor's comment: Restore trust before it’s too late

When it comes to dealing with service providers, you need to trust that the product you are getting is worth the money you are paying, that the service you have paid for is going to be provided and that the company is going to be there when you need it.

What has become clear, through the various surveys I have received in my inbox, is that insurers are not trusted – and that this is mainly because of the service they have provided. PWC research showed only 27% of customers trusted insurance providers, while 32% trusted retail banks and 28% trusted financial advisers.

It may be National Customer Service Week but, for 39% of PWC’s participants, their experiences of dealing with insurance providers were the most influential factor in their distrust.

I recently attended an industry dinner with several national financial agony-aunt journalists and consumer champions who told me their intrays are always overflowing with complaints about the industry. What riled them more, however, was that in cases where they step in and contact insurers to explain the issues, claims are quickly settled – something they feel should be happening when the customers themselves raise a problem.

My own experience of insurers this week saw a household policy I’d taken out with a top-five insurer, through my building society mortgage provider, cancelled and re-underwritten purely to change the inception date because the computer said no – not a perfect customer experience by any measure.

This public perception is likely to leave insurers feeling a bit hard done by as I’m sure most market players feel they are ‘treating customers fairly’ and that smallprint is there to protect customers. But the reality is that, despite how well insurers think they are doing, policyholders believe differently.

If this wasn’t an issue before, the latest figures must be a wake-up call for the industry. The public is not happy with insurers and the market can no longer afford to continue doing business in the same way – especially as one-third of respondents to another survey revealed they were cutting back on non-essential insurance because of cost. The market must now look at transparency, flexibility and fairness and win back the trust of the consumers.

Changes must be made, otherwise customers will switch off from insurance even more – and the only way to bring them back will be a radical overhaul of the whole system.

Stephanie Denton, editor

This article was published in the 9 October edition of Post magazine.