Insurer satisfaction slipped to 84% in the final quarter of 2024, down from 86% a year earlier.
That is according to the latest new public trust data from the Chartered Insurance Institute (CII).
The research revealed that merely 14% of consumers reported being "extremely satisfied" - the lowest level since the Index began in 2019.
The study identifies key actions that consumers believe would help build trust, including loyalty discounts, fair treatment of long-term customers, and professional complaint handling.
While claims handling performance improved for the fourth consecutive survey, consumers expressed concerns about pricing fairness and customer service.
Introducing the concept of 'consumer support', FCA's Consumer Duty considered 'sludge practices', such as making customers wait a long time for a call to be answered or imposing a long-winded complaints process, a potential breach of the rules, according to CII Group Policy & Public Affairs director Dr Matt Connell (pictured).
"The latest results of our Public Trust Index suggest there have been some improvements, but consumers continue to feel insurers could do better. It is apparent that insurers cannot allow customer service to be a poor relation in their operations," Connell added.
By contrast, SME satisfaction has risen to 83%, matching the previous high from late 2022. However, SMEs indicate that improvements are needed across a broader range of areas, including individualised risk assessment, clear communication, and simplified policy documentation.
The research also revealed demographic variations, with satisfaction among 18-34-year-olds rising to 82% from 79%, though still lagging behind older age groups. Price comparison site usage has increased by five percentage points to 44% since the previous survey.
"It is also no surprise that the expectation gap around price rose as inflation went up," Connell noted. "It has started to decrease since inflation has come back under control, but there is still a strong perception that insurers are not always pricing fairly."
The findings indicate the ongoing challenge for insurers to balance competitive pricing with customer service excellence and the need to rebuild trust across all customer segments.
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