Claims and engagement boost positive perceptions of insurers, survey finds

A report released by Guidewire, based on its annual insurance customers attitude study, reveal that UK policyholders’ opinion of the insurance industry, and their relationship with their insurer, becomes more positive after making a claim, as well as leading them to be more open and accepting of digitalisation and innovation within the sector.

As the report reveals that negative opinions of the sector prevail among those who have not made a claim, or have had little communication with their insurer, it underscores that to boost customer opinions, trust, and gain acceptance of new technologies, insurers must increase engagement and communication with their customers. 

Guidewire’s report, ‘The Insurance Engagement Gap and its Impact on Perception and Innovation’ explored how the impact of factors such as the cost-of-living crisis, advance of technology, and diversity and inclusion, have influenced customers’ view of insurers, and reports on consumers’ attitudes towards the sector and its ongoing digital transformation.

The report shows that customer attitudes toward the insurance industry have remained relatively fixed; a third (33%) of UK policyholders said they has a negative opinion of the industry and that this had not changed in the past twelve months, compared to 19% who said that they already had a positive opinion, and this had not changed.  

However, over one in ten (12%) of customers reported that they had a more positive view due to actions insurers had taken to support people. The report therefore reveals a strong correlation between those who have made a claim, and those with a positive opinion of insurers. Notably, four in ten (40%) respondents who had made a claim in the last twelve months reported that actions taken by insurers to support them had made them feel more positively toward the industry, compared to just 8% of those who had not made a claim.

The findings suggest that insurers need to find a way to replicate the positive experience that customers have upon making claims across different aspects of the policyholder experience, and make clear the value that insurers can provide to customers outside of claim handling. As Will McAllister, SVP and Managing Director, EMEA, Guidewire notes,

 “our findings showcase just how essential personalised customer and insurer interactions are. Insurers have a key role in their customers’ lives, but at the moment this truth is only made clear to policyholders at the point at which they make a claim. […] If insurers want to create more customer loyalty, and thus improve their expense ratio, they need to find ways to add value to their customers’ lives so that the claims and renewal processes are not the only meaningful engagements a customer has with their insurer.”

Furthermore, the report highlights a preference among customers for traditional forms of engagement when contacting and communicating with their insurers, emphasising the value of interaction; the survey revealed 66% of customers preferred phone contact in the event of a claim, a 10% increase on 2023, and 50% preferred email contact, an 11% increase compared to 2023. These numbers increase when a customer has made a claim, with contact via phone and email becoming even more popular than the average at 79% and 56% respectively.

The survey also provided some significant insights into customer attitudes towards the use of Artificial Intelligence (AI) by insurance companies, revealing that whilst the notion of insurers using AI as a supporting function was generally accepted, customers are still uncomfortable with the thought of it being used to make decisions. Almost half of respondents to the survey at 49% were uncomfortable with AI being used to make decisions regarding policy price without human intervention, with 26% feeling very uncomfortable. Conversely, 32% responded that they would be comfortable with AI assisting insurers with filling out documents, with 30% comfortable with AI being used to aid a human call handler in answering their questions.

Customers remained concerned, however, about how their private data is being harvested and retained, with 24% of respondents in 2024 reporting that they did not understand the need for insurers to collect policyholder data, compared to 18% in 2023- a 6% year-on-year increase. Whilst understanding as to why insurers would collect more data is higher among customers aged 18-24, 47% would prefer they did not. Although, 28% of customers were happy for insurers to collect and use their data because they felt it would improve services and reduce prices for those with low-risk behaviours.

Consequently, the survey highlights whilst the benefits of data analysis and technology are recognised, insurers could do more to communicate to customers and boost awareness surrounding the purpose and benefits of data collection for insurers and their customers to boost acceptance and positive attitudes. As McAllister notes:

“The responses suggest that insurers still have a way to go in communicating and demonstrating the value the industry can deliver to improved pricing, better claims handling, and even loss prevention through enhanced use of data and technology […] given the potential for data and technology to transform how insurance is purchased and provided in the years ahead, this feels like a key area where the industry should focus its attention.”