Modern Insurance Magazine Issue 62

INTERVIEWS
Modern Insurance
Magazine recently
sat down with
Sam Richardson,
Deputy Editor
of Which?
Money, to query
the ‘consumer’
aspect of the new
Consumer Duty.
How does the
general public
perceive insurance,
and can these new
regulations make a
positive impact in
the long term?
with Sam Richardson,
Which? Money
Sam – drawing upon your
experience at Which? Money,
Qwhat does the current relationship
between consumers and insurers
look like to you?
A
We survey home and car insurance
customers who have made a
claim within the last one or two
years. Almost all of those customers have
reported satisfaction on these surveys;
90% of home insurance claimants and
93% of car insurance claimants are happy
with the overall service received from their
insurance provider.
I’m sure you’ll agree that this is really
encouraging, but the fact that this
feedback comes from claimants is
certainly worth noting. Where customers
haven’t needed to submit a claim, we’re
seeing plenty of irritation around price
rises and claims inflation right now. It’s a
matter that is really testing patience, and
customers are struggling to see the value
in their premiums - especially where those
price rises end up significantly higher
than the standard rate of inflation. Some
aspects of this are explainable, but there’s
little we can do to provide the necessary
comfort to those with the highest rise in
the cost of their premiums.
Oftentimes, we’ve also found that if
something goes wrong in the claims
process, it goes very wrong. We’ve
heard examples of many home insurance
customers having to chase their insurer on
multiple occasions, alongside reports from
three quarters of car insurance customers
to say that they weren’t offered a suitable
explanation when their claim was rejected
or only partially accepted. On top of
this, there’s the General Insurance Value
Measures from the Financial Conduct
Authority (FCA), highlighting pretty
poor payout rates from home and travel
insurance providers across the board.
This creates a general sense of scepticism
between consumers and insurers, and
seemingly, it has been that way for many
years.
What’s the most common
grievance that consumers
Q report to Which? in relation to
insurance?
Anecdotally, most of the
complaints we’re seeing are around
A the subject of price rises, in some
cases addressing inexplicably huge jumps
in premiums without much reasoning
given as to why this was necessary. In
claims, our surveys indicate that the main
areas of dissatisfaction address delays
with the speed of settlement, the lack of
support provision in place from insurers,
and poor communications around the
status of a claim.
With this in mind, how do you
expect to see the new Consumer
QDuty alter the reputation of the
insurance industry over time?
Insurers have been subject to high
levels of scrutiny for many years,
A including some changes to Product
Governance rules in General Insurance
back in 2021. I’m confident that we’ll see
some improvements in the long-term,
and while better outcomes won’t happen
overnight, when we think about the
potential for longevity within these new
regulations, I’m sure that we’ll see some
developments in consumer satisfaction as
the new Consumer Duty takes hold.
At the moment, we’re seeing a high
number of complaints to the Financial
Ombudsman Service (FOS), of which
a lot are upheld. I would say that
improvements in insurance products
and processes specifically will result in a
consequent handling of those complaints
internally, namely in a way that doesn’t
14 | MODERN INSURANCE