Consumer trust and concern in November 2023
Summary
- Worry about high prices remains extremely high, despite recent improvements in the inflation rate
- Trust in insurance is lower than in almost all other sectors we track and has fallen for the last two quarters. 21% of consumers said they trust insurance companies to act in their best interest, and 44% said they do not trust them
- Rising premiums and claims experience are key factors shaping consumers’ trust in insurance companies
Consumer concern about prices remains high
Although the inflation rate has recently fallen, prices are still rising for consumers. Food inflation remained in the double figures in October at 10.1%, petrol prices rose for four months in a row between July and October and it was recently announced that the energy price cap will go up by £94 in January.
Energy prices remained consumers' top concern in November with 85% of consumers saying they were worried [1]. Whilst this is historically high, it is slightly down on the 90% and above worried levels seen throughout 2022 and early 2023. Concern about food prices dipped slightly (83%) but remains extremely high by historical standards. The biggest change this quarter was the proportion concerned about fuel prices (79%), which rose for the first time since August 2022 and up from 75% three months prior. All of these figures remain significantly higher than the levels seen in 2020 and the first half of 2021 when levels of concern generally sat between 50% and 60%.
Worry about high prices and housing costs remains
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave.
Consumer trust in the insurance sector falls for the second straight quarter
Most sectors saw a small increase in net trust in the past quarter; trust in the food / groceries industry recovered by 6 points this quarter to +36, trust in the airline industry also recovered by the same magnitude and trust in the water industry rose by 5 points. The same cannot be said about the insurance industry however, for which trust fell for the second straight quarter to a net trust level of -24. This was calculated from 21% of consumers who said they trust insurance companies to act in their best interest, and 44% who said they do not trust them. This is the lowest trust level recorded for the sector since we started collecting data in the insurance sector in August 2020, when the previously low was at -23.
Consumer trust in the insurance sector falls for the second straight quarter
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave. Net trust is the proportion of consumers who say they trust a sector to act in their best interest quite a lot or a great deal minus the proportion who say they don’t trust a sector very much or at all.
Rising premiums and claims experience are key factors shaping trust levels
This quarter we asked consumers why they trust or don’t trust insurance companies to act in their best interest. Beginning with those who don’t trust them at all, many respondents pointed to their premiums going up and question why they have risen so dramatically:
“I think insurance is overpriced, and that prices have increased a lot over the last year or so without any real reason.” Male, 25-34, Yorkshire
“I haven't had an accident in 4 years. Despite this, they have put my premium up over 100%” Male, 35-44, Scotland
On top of this, many of those consumers untrusting of insurance companies hold a strong belief that they are much more interested in their profits at the expense of their customers’ welfare:
“Insurance companies go to great lengths to maximise their profits and minimise the odds of having to pay out to customers. It has nothing to do with protection and everything to do with profit over the welfare of people.” Male, 35-44, Yorkshire
“Only interested in profit.” Male, 55-64, North West
For other respondents, their reason for not trusting insurance companies to act in their best interest fell down to their personal experiences making a claim:
“Every time I have made a claim they have always tried to find something to void the policy so they don't have to pay out.” Male, 45-54, Wales
“[I] have experienced it first hand. You cannot trust the wording of policies as insurance companies have their own bank of meanings.” Male, 65+, North East
“I've had a really bad experience in the past where they didn't have my best interests at heart and this rumbled on for about 2 years” Female, 25-34, North East
Other people have not had a negative personal experience but perceive or have heard about difficulties making a successful claim. Both these respondents also point to rising premiums:
“All I read online about insurance companies is negative; people struggling to get payouts, premiums going up but service going down.” Male, 45-54, North West
“I think insurance is overpriced, and that prices have increased a lot over the last year or so without any real reason. I also think that insurance companies will do anything they possibly can to avoid paying out. They are a necessary evil.” Male, 25-34, Yorkshire
Having a good claims experience can make consumers more trusting
In contrast to the above, a number of consumers who trust insurance companies to act in their best interest pointed to the good claims experience and outcome they had:
“In my experience, insurance companies have helped me escape having to pay large bills on for example, my broken laptop - they worked in my best interest to prevent me having to lose money.” Female, 18-25, Yorkshire
“When I had my car accident several years ago my insurer couldn't have been more helpful” Male, 65+, South East
“When our home flooded our insurance company dealt with us quickly and sympathetically.” Female, 65+, North West
A number of other consumers trust insurance companies because they are regulated and should act in customers’ interest:
“They are regulated” Male, 65+, Eastern England
“They are governed by the FCA so must act fairly” Female, 65+ East Midlands
“They’re supposed to work in the interests of their customers.” Female, 18-25, North West
In summary, people’s personal experience and the quality of interaction with insurance companies plays a crucial role in their perception of them. Unsurprisingly, those who have had a negative experience making a claim or feel their premiums are going up unfairly don’t trust the industry, while those with better stories to tell find the sector more trustworthy.
Methodology
The fieldwork was conducted by Yonder on behalf of Which between 10th and 12th November 2023. A sample of 2,093 consumers was surveyed online and weighted to be nationally representative.