The pressure is mounting on insurers to restore trust in the industry as SMEs become increasingly frustrated and concerned around policy exclusions, particularly related to the coronavirus pandemic.
According to the CII’s Public Trust Index, which surveyed around 1,000 customers and small businesses across the UK in April, the impact of the pandemic on businesses has affected their outlook on the insurance profession. Those that had experienced little financial impact were still focused on the same issues as before – primarily around renewal pricing; those that were somewhat impacted were concerned about how the policy had been explained and levels of transparency; while those significantly impacted wanted immediate assistance and to know what the policy would do to address their needs.
With this in mind, the CII is urging a three-step approach:
- Firstly, it wants the industry to find better ways to address renewal pricing, specifically bearing in mind the ABI/BIBA Guiding Principles and Action Points for General Insurance Pricing. SMEs want to ensure they are being treated fairly.
- Secondly, improve advice processes and ensure clients understand not only the insurable risks, but also the non-insurable risks they face. It should also be outlined as to what can be done to address both.
- Finally, look to reach claims settlements wherever possible – assistance at an early stage will help boost trust much more than compensation given out at a later date.
“Firms that are affected by coronavirus are becoming more concerned about exclusions in their own policies, especially around liability and property insurance,” said Dr Matthew Connell, director of policy and public affairs for the CII.
“If we, as a profession, don’t rise to the challenge of improving understanding among SMEs, we risk moving into a ‘forced trust’ position where they no longer trust that the policy will protect them adequately but continue to rely on it because of a lack of other alternatives.
“SMEs understand the value of insurance, but they want a better conversation about how to manage risks. The way in which insurers manage the effects of the coronavirus is going to have a lasting impact on trust in the profession, especially for SMEs, who have a higher level of dependency on their protection during significant business interruption.”