Trust in the insurance industry falls to new low, Which? warns

Trust in the insurance industry has hit the lowest levels since Which? started measuring it, as premiums skyrocket for millions of people across the UK. 

Which?’s monthly Consumer Insight Tracker found that trust in the insurance industry has dropped to a confidence score of -24. Just a fifth (21%) of consumers said they trust insurance companies to act in their best interest while almost half (44%) said they do not. This is the lowest trust level recorded for the sector since Which? began tracking trust in the insurance sector in August 2020.

The consumer champion uncovered several reasons why trust in the insurance industry may have plummeted, including rising premiums, particularly for car insurance. 

Confused.com said the cost of car insurance went up by almost 60 per cent in the year to October 2023. The average cost of a comprehensive car insurance policy is now £924 - an increase of £338 over last year.

Many customers question why their premiums have risen so dramatically. One man from Yorkshire said: “I think insurance is overpriced, and that prices have increased a lot over the last year or so without any real reason.” It is unsurprising that a lack of explanation for the premium rises may lead to many distrusting the industry.

Many consumers who distrust the insurance industry also believe firms are prioritising profit over customer welfare. One man aged 34-44 said: “Insurance companies go to great lengths to maximise their profits and minimise the odds of having to pay out to customers. It has nothing to do with protection and everything to do with profit over the welfare of people.”

For others, their reasons for not trusting insurance companies to act in their best interest came down to their personal experiences or what they have heard from others about making a claim. A woman from the North East said: “I've had a really bad experience in the past where they didn't have my best interests at heart and [my claim] rumbled on for about 2 years”. 

A man from Wales said: “Every time I have made a claim they have always tried to find something to void the policy so they don't have to pay out.”

Of 34 insurance types the Financial Conduct Authority (FCA) publishes data on, standalone buildings and contents cover are among the five products least likely to pay claims. During 2022, some 99 per cent of car insurance claims were accepted – but this figure was just 68 per cent for standalone buildings cover, which covers life-changing events like fire or flood. 

Earlier this year, the FCA, introduced a new Consumer Duty with a set of higher and clearer standards of consumer protections which require businesses to put their customers’ needs first. Insurers need to ensure they are offering value for money and support their customers’ understanding, including  when they need to make a claim. The FCA must monitor firms’ performance and act swiftly against any firms that fall below the required standards. 

Anyone who feels they are being treated poorly by their insurer should consider switching. Using customer surveys and expert analysis, Which? has compiled guides on the best and worst car, home and travel insurers so that consumers can choose a policy that works for them with confidence.

Rocio Concha, Which? Director of Policy and Advocacy, said: 

“With insurance premiums continuing to soar and many consumers reporting bad experiences with their insurer, it's hardly surprising that trust in the industry has continued to fall. 

“Insurers need to ensure they are offering value for money and that their customer service is up to scratch when you need to make a claim. The FCA should not hesitate to take action against any firms falling short. 

“Anyone who isn’t happy with their current insurer should consider switching or haggling. Our research shows the price quoted by your insurer isn’t necessarily the best price available and doing your research on comparison sites, haggling and switching can offer savings.”

ENDS

Notes to editors

Which? cost of living campaign

The consumer champion is running a campaign calling on businesses in essential sectors – supermarkets, telecoms and energy – to do more to help their customers through the cost of living crisis. Consumer Insight TrackerThe Consumer Insight Tracker is an online poll conducted monthly by Yonder Consulting on behalf of Which?. 

It is weighted to be nationally representative with approximately 2,000 respondents per wave.

Which? tips on how to haggle effectively with your insurer

• You should always check other deals on the market to know whether or not what your insurer is offering you is the best rate 
• Have a rival's rate and your rate to hand while on the telephone to your insurer - this should contain this year's deal and the previous price you were paying

About Which?

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. 

As an organisation we’re not for profit and all for making consumers more powerful. The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at [email protected].