The Value of Protection white paper, which is based on research conducted by the Beddoes Institute in association with the AFA and BT, found that consumers have a negative view of the insurance industry when it comes to the likelihood of receiving an insurance payment.
This lack of trust, combined with a low understanding of what personal insurance products entail and a “she’ll be right mate” attitude is combining to a low take-up of insurance.
In addition, more than 70 per cent of consumers surveyed said that in “Utopia” they would want a focus on holistic support from their insurer during the time of claims.
“In terms of insurance claims perceptions, what is at the heart of this is really a significant issue of distrust,” Beddoes Institute psychologist Dr Rebecca Sheils said.
“We have this massive gap between the expectations and perceptions of the consumer and what they really wanted to have happened.
“It’s a complex problem but … at the core of it is we need to improve as an industry, improve perceptions of the value of these life products.”
The white paper also looked in depth at the claims experience of consumers to uncover if their expectations met reality.
“The claims experience [of consumers] was miles better than the expectation they had prior to claiming,” AFA chief executive Brad Fox said.
“So if we recognise that we have a massive underinsurance issue, one of the ways that we need to overcome that is to change perceptions of insurance, and that’s a big piece of work.
“It's something that takes consistency, it takes a broad approach and it needs advocates. The best advocate that we can build is people that go through a claims experience.”
BT Financial Group head of life insurance Phil Hay said that insurance companies need to focus more on an emotional intelligence approach to claims management to improve industry perceptions.
“In reality, the more effective claims management we have, the more we look at the quality of life, the better the return for the life companies,” Mr Hay said.
“Because yes, it increases your costs, but the knock on effect is that people do return to work better, their quality of life is better.”
