The UK insurance industry scores well below the threshold for trusted status. Yet 90% of those who have made a claim say it was paid in full or in part, according to the Allianz UK Trust in Insurance Benchmark, a new annual study.
The report was carried out by Edelman on behalf of Allianz UK between January and February 2026. It surveyed 2,000 UK consumers and 1,026 SME decision-makers on their general attitudes toward insurance.
On the benchmark's 100-point scale, consumers score 56.2 and SMEs score 60.5. Both fall within the "average" band of 51 to 70, above the "poor" threshold but short of the "good" tier of 71 to 100.
Insurance ranks ninth out of 13 sectors for trust among consumers, behind science, the NHS, engineering, charity, banking, private healthcare, accountancy and investment. Among SMEs, it ranks eighth out of 11.
Around three-quarters of consumers associate the industry with loopholes and profit-first behaviour. Among SMEs, 74% believe insurers look for loopholes to avoid paying claims and 71% say insurers care more about profit than helping customers.
The research finds that 91% of consumers and 90% of SME leaders agree insurance is essential protection against unexpected events. That recognition, however, does not produce corresponding confidence in how insurers behave.
Trust rises sharply among those who have made a claim. More than 80% of consumers who claimed describe the process as handled fairly and easy to understand, and 90% say it resulted in payment. Among SMEs with claims experience, 85% to 86% rate the process as fair and clear, and 95% report the claim was paid.
Trust in a respondent's own insurer runs more than 20 points higher than trust in the industry overall. Consumers give their personal insurer a net trust score of 45 against 23 for the industry as a whole. SMEs give theirs 52 against 32.
The gap points to a persistent problem: positive outcomes are not reaching those who have yet to make a claim. The Financial Conduct Authority (FCA) raised a similar concern in its 2024 Consumer Duty review of insurers and brokers. It found that many firms could not show how they were providing fair value to customers.
The benchmark measures four equally weighted pillars: understanding of underinsurance, perceived adequacy of cover, perceived consequences of underinsurance, and emotional comfort. Emotional comfort scores lowest for both groups. Consumers record 40.7 on that pillar against 64.7 for understanding, while SMEs score 43.1 against 68.9.
When asked what drives trust, both groups ranked relational factors well above innovation. "Caring for customers' best interests" ranked first among consumers at 36%, followed by "providing transparent and accurate information" at 32%. Innovation-related factors scored 2% or lower across both audiences.
Low emotional comfort carries a direct commercial consequence. ABI research from January 2026 found that UK SMEs with weaker insurance confidence are more likely to be underinsured. Distrust of the claims process was identified as a contributing factor in cover gaps.
Business size shapes the depth of the problem. Small businesses score 59.6 on the benchmark against 61.3 for medium-sized firms and are 1.6 times more likely to fall into the lowest confidence band. Emotional uncertainty is consistent across both sizes, which means scale alone does not resolve the underlying reassurance deficit.
Colm Holmes, chief executive officer of Allianz UK, said: "Trust in insurance is not held back by lack of understanding, it's held back by lack of reassurance."
Holmes said the findings show insurance is accepted as essential but not yet trusted to deliver. "People buy insurance for peace of mind, so it should concern all of us that so many still doubt it will be there when they need it," he said.
On the consequences of low confidence, Holmes said: "The result is not just poorer outcomes for customers, but greater vulnerability for households, businesses and the wider economy."
A 2025 Hiscox report found that 74% of SMEs globally remain underinsured. Many could not accurately describe key types of cover, a pattern consistent with the low emotional comfort scores recorded in the benchmark.
Allianz UK said it plans to publish a claims transparency report and continue improving customer communications under the FCA's Consumer Duty regime.
The benchmark is intended to be repeated annually as a measure of how trust across the UK insurance sector changes over time. Claims paid figures are based on self-reporting by survey respondents.
