Insurance customers reveal mixed feelings towards industry

Guidewire has released the latest edition of its annual insurance customer attitudes study, shedding light on how various factors such as the cost-of-living crisis, technology, and diversity and inclusion impact customers’ views of the insurance industry. The report, titled ‘The Insurance Engagement Gap and its Impact on Perception and Innovation,’ reveals a range of insights into the current sentiment among policyholders in the UK.

Conducted by Censuswide, the study surveyed 4,126 insurance consumers across Germany, France, Spain, and the UK in February 2024. It aims to understand policyholders’ perceptions of the sector, particularly regarding new technologies, inflation, and the attractiveness of the insurance industry as a workplace.

Public opinion

The study found that opinions about the insurance industry are relatively fixed. A third (33%) of UK policyholders reported holding a negative opinion of the industry, unchanged over the past year. This contrasts with 19% who maintained a positive opinion. More than one in ten (12%) said their view had become more positive due to insurers’ efforts to support people. A strong correlation exists between those who have made a claim and positive opinions about insurers, with 40% of recent claimants feeling more positively towards the industry compared to just 8% of non-claimants.

Digitalisation

Despite the digitalisation trend, customers still prefer traditional contact methods when dealing with insurers. The majority prefer phone contact (66%, up 10% from 2023) and email (50%, up 11% from 2023). These preferences are even stronger among those who have made a claim, with 79% favouring phone contact and 56% preferring email.

Other key findings include:

• Usage-based insurance (UBI): While almost half (47%) of customers seek greater flexibility through UBI policies, only 10% currently have such a policy, marking a 4% decrease from 2023.
• Embedded insurance: Consistent with last year, 39% of respondents are comfortable buying insurance from companies like IKEA, Amazon, or Tesla. Among more digitally savvy customers, 66% who have processed a claim via social media would consider buying insurance through embedded offerings.
• AI in insurance: Nearly half (49%) are uncomfortable with AI making decisions about insurance pricing without human intervention, and 26% are very uncomfortable. However, 32% are comfortable with AI assisting in document filling, and 30% with AI helping human call handlers answer questions.
• Privacy concerns: There is a growing concern about data privacy, with a 6% increase in respondents (24% in 2024) not understanding why insurers need to collect their data. Younger customers (18 to 24 years) are more likely to understand the need for data collection, but almost half (47%) would prefer it not to be collected. Nonetheless, 28% of customers are willing to share data if it improves services and reduces prices.

The insurance industry as a workplace

Regarding the insurance industry as a workplace, perceptions are relatively positive. Nearly half (47%) of 18-to-24-year-olds and 41% of 25-to-34-year-olds view it as an innovative and exciting sector. Diversity is also seen positively, with 48% believing the industry is diverse, rising to 63% among 18-to-24-year-olds.

Household decision makers

Decision-making in insurance purchases is primarily individual, with 49 percent of respondents being the sole decision-maker in their household. Men are more likely to be the sole decision-maker (54%) compared to women (46%). Only 5 percent rely on advice from insurance brokers, although this increases to 13% among those who have made a claim. Brand recognition (39%) is the most influential factor in choosing an insurer.

What are the experts saying?

Will McAllister, SVP and managing director, EMEA at Guidewire, commented, “Even though 2024 was a challenging year for customers and the insurance industry alike, our findings showcase just how essential personalised customer and insurer interactions are. Insurers have a key role in their customers’ lives, but at the moment this truth is only made clear to policyholders at the point at which they make a claim. This cannot remain the case. If insurers want to create more customer loyalty, and thus improve their expense ratio, they need to find ways to add value to their customers’ lives so that the claims and renewal processes are not the only meaningful engagements a customer has with their insurer.”

Michael Cook, insurance partner and Guidewire Lead at PwC UK, added, “It is clear that the insurance industry still faces a number of challenges, with many of these being called out in the Guidewire consumer survey. These are especially acute in some of the personal insurance lines, such as motor, which means the trading and performance in this sector are particularly challenging. While technology can, and does, clearly play a role in resolving these challenges, it is the opportunities that advancing technology presents that will deliver greater benefits to insurers, the industry, and most importantly their customers.”

Image: Canva.

Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.