Transparency Breeds Trust
While this might not seem like the most piercing business insight in the world, that doesn’t make the question of trust any less urgent, or the manifestations of mistrust any less varied.
April 11th, 2022
In fact, a report from Adobe published in 2022 is quick to point out that an overwhelming 75 per cent of executives have found it more difficult to build and maintain customer trust since the beginning of the pandemic – demonstrating how quickly the tides of trust can turn.
Of course, for the insurance industry, it would be a little bit disingenuous to say that any consumer mistrust is sudden, unexpected, or just attributable to the pandemic.
Back in the pre-pandemic era of 2016, the Financial Conduct Authority (FCA) published a report discussing the difficulties faced by insurance consumers – including “complex” and “confusing” language surrounding policies that are, at any rate, “difficult to compare even for simple products.”
This kind of landscape is hardly conducive to building up a sense of trust that insurers have consumers’ best interests at heart – especially when you combine these opaque practices with the general lack of goodwill that the industry has managed to generate over recent years and decades.
The zenith of that mistrust reared its head (if zeniths have heads) around 2019 when a YouGov poll of British people found that 68 per cent of policyholders “believe that providers will do whatever they can to avoid paying out in the event of a legitimate claim.”
With this low regard ruling consumers’ actions, it’s absolutely no surprise that the same survey says 73 per cent of policyholders at that time intended to change their insurer – why would they stay loyal to entities they can’t rely on or respect?
These dire figures certainly account for the deep concern about trust exhibited by the likes of the Chartered Insurance Institute (CII), which recently described mistrust in the industry as an “intractable problem.”
In the same report, the CII also reflects on how the industry might start addressing the problem – and my eye was caught by a quotation from a University of Warwick report commissioned by the Financial Services Compensation Scheme which runs as follows:
“The issue of trust arises whenever one entity (e.g. a financial services company) agrees, whether explicitly or implicitly, to perform some service for another (e.g., a consumer) where, crucially, the consumer cannot directly observe whether the service is being performed as agreed.”
Like all good stories, this gesture towards a more transparent approach takes us back to the start (in the form of the March Adobe survey I mentioned at the start of this piece).
Adobe found that 84 per cent of respondents described “transparency” as key to customer trust – and though that was said in relation to customer data, it’s absolutely true of insurance too.
We now live in a remote world where talk is cheap – it’s easy to make claims about trustworthiness, but the insurance industry now needs to demonstrate its commitment to allowing customers to “directly observe” its processes, assuring customers of its upstanding intentions through deeds – not words.
