It stems from the fact that 68% of uninsured people and 55% of insured consumers believe that companies will do what they can to avoid having to hand over any money.
But this stands in stark contrast with figures that show over 95% of claims are, in fact, paid.
Clive Allison, UK insurance protection leader at EY, said: “We undertook the research to really understand what people – both those who hold a protection product currently and those that don’t – think about protection insurance and what they’d like to see in the future.”
The firm’s research was based on interviews with a national representative sample of 1,000 UK consumers.
Affordability is an issue
The cost of getting protection was one of the main concerns, with 42% of respondents claiming they either didn’t need insurance or that it was a waste of money.
In addition, 40% of people without insurance believe they won’t be able to afford cover, and 25% said they prioritise day-to-day outgoings over putting money towards cover.
However, responses differed according to age.
Under-35s showed more positive attitudes towards incentives and loyalty programmes (60%), compared to over-55s (19%).
“Perhaps the most significant findings were the perceptions around trust and value for money – which of course need to be tackled first and foremost – but the research also highlighted how people of different ages responded to different incentives and management tools,” Allison added.
According to EY, there are many things providers can do to try and gain back customers’ trust.
One of the suggestions focuses on the creation of a ‘travelling’ protection product. This means that coverage would follow a client throughout their life and would be “dialled up or down as needed”.
This would allow customers to make changes according to their personal circumstances, such as changing jobs or moving houses.
Currently, only 17% would follow the recommendation of their insurance provider to update their protection plan – emphasising the current lack of trust consumers have that their provider is acting in their best interest and not solely for profit.
Additionally, a similar concept was recommended for life insurance. EY thinks that providers should move away from selling life cover as a financial product and think of it as a service to their clients.
In this way, firms could build engagement and would pass more control to their customers, which could potentially create a more trusting relationship.
Focus needs to shift
“There are real opportunities to improve interaction with, and empathy towards, customers and improve their overall experience,” Allison said.
“However, to make the most of these opportunities, a shift in focus is needed – away from educating people about complex protection products to designing simple protection services that customers need and want.
“While no one silver bullet exists, our research has revealed the need to better understand the customer and their relationship with protection products.”