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Crisis of Trust - Insurance

Trust series #3 - Maintaining trust in an otherwise turbulent time

Published on
October 30, 2019

In this blog series we’re talking about trust across the banking and financial services, the insurance industry, and the digital space. In the first blog, we talked about what exactly trust is, why trust is important in business, and how exactly businesses can begin to tackle the complex nuances of trust with their customers. Our point of view has been developed from qualitative research with customers, from which we developed a persona matrix for businesses to better understand their customers.

The previous blog focused on trust in the banks and financial services. In this blog post, the third of the series, we are focusing on trust in the insurance industry.

Top elements of trust in the insurance industry

When it comes to insurance, consumers have a baseline mistrust in the products they purchase.This is due to a number of factors such as unclear terms and conditions, past experiences, jargon and media coverage. But despite their unease, consumers continue to purchase these policies begrudgingly. Insurance is seen as a mostly “essential service”, so consumers will continue to purchase insurance policies for peace of mind, despite the lack of trust Over time, trust levels can also wane if the consumer has continued to make payment but not claimed anything.

Consumers feel as though their providers are hiding behind the fine print

Consumers do not often have clarity over the cover they purchase, and are skeptical that they will be covered if they make an insurance claim. In the event of an accident, consumers feel as though their insurer will hide behind legalities and refuse to do what’s right.

“The insurers often find legal loopholes not to pay you.”
“Everyone knows someone who has been stiffed by an insurance company.”
“They’re like a fish. So slippery. If you make a claim they will always find a way to slip away.”

The claims experience can make or break a consumer’s trust in their insurer

Insurers exist for the claims experience. Given the assumption that providers are hiding behind the fine print, the claim’s experience is a critical moment for the consumer. During the claims experience, the consumer is either pleasantly surprised by the integrity of their insurer or has their worst perceptions confirmed.

“In the insurance space, ethicality is about the insurer sticking to the agreement and honouring the claim when It’s crunch time.”
“The claims process is the most important part. If they don’t do it well, I lose trust completely.”
“Two years ago, I had a big operation and the insurer helped me out a lot. I trust them a lot more now.”

There is some perception of safety in being with big, long-time insurers

Consumers associate some level of comfort with being insured by a big provider. This comfort somewhat impacts their decision to go with one insurer over another.  

“You trust the big insurers because they’re national dinosaurs.”
“I chose NRMA because they’re the most well known brand.”

However, transparency and price are also key decision drivers for consumers

Consumers find it difficult to compare policies on attributes and are often swayed by price when it comes to decision making. Where provided, transparency of coverage and terms are also helpful.

“I want transparency, not only from the brand but to compare other brands as well”.
“I want transparency of the benefits included.”
“I went with Budget Direct because of the price.”
“I chose my insurance based on price point, or any added features.”

Since insurers exist for the claims experience, which is often a point of frustration for consumers, there is a great opportunity for providers to differentiate on experience by relieving some of the moments that matter for consumers.

In our last blog of the trust series, we’ll shift our focus to trust in the digital space.

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