The Chartered Insurance Institute’s (CII) Public Trust Index surveyed 1,000 consumers and 1,000 small and medium-sized enterprises (SMEs) in May and September 2020 to reveal the impact Covid-19 has had on faith in the insurance profession.
2020 saw pressure on travel insurers increase, with high levels of cancelled policies, and with some airlines looking to avoid responsibility for compensation by telling customers to claim on their insurance instead.
This pressure can be seen in the results of the CII’s Public Trust Index, which measures the gap in expectations for key measures on a scale of plus or minus 30.
Less trust in insurers avoiding payouts
The gap in perceptions around the statement ‘the insurance company does not try to avoid paying out’ widened from a very strong 2.97 at the beginning of 2020 to a much more concerning 8.24 in September 2020.
The score for the statement ‘I can get through to the insurance company quickly at any time’ went from an excellent 1.94 to a very high 11.89 by September 2020.
In contrast, motor insurance saw a marked improvement in its expectation gap.
A huge change in people’s lifestyles
Matthew Connell, Director of Policy and Public Affairs at the CII, said: “2020 saw huge changes in people’s lifestyles. We have been travelling less, for example, average motor claims reduced by 48 per cent in the second quarter. The reduced demand for claims services does seem to have resulted in a significant improvement in service, with customers reporting that it is easier to get through to firms and that they are less likely to be unhappy with the result of their claim.
“In contrast, travel insurance, which has traditionally had a very high level of trust in its claims processes, has suffered, as holidays continued to be disrupted throughout 2020. The fact that many airlines directed customers to claim on their insurance instead of paying out statutory insurance straight away has undoubtedly had an impact on levels of trust.”
Statistics from the UK’s Civil Aviation Authority recently revealed that around 1.9 million British travellers may have travelled abroad uninsured in the 2020 peak holiday season, despite coronavirus risks, showing a need for travel insurers to win back travellers’ trust.