Insurance is a promise of help when things go wrong. Without trust, this promise is meaningless and insurance markets cannot function. This is the insight that led to the creation of the CII and the instruction in its Royal Charter to ‘secure and justify the confidence of the public’.
However, without clear thinking about what trust is and where it comes from, building trust becomes a shot in the dark. This section is an update on:
- Our progress in better measuring the level of public trust in the profession; and
- Our leadership in providing the means for the profession to take practical steps towards building public trust through improved access and relevance for all sections of society.
Public trust index
In June 2018 we published our first Public Trust Index, which for the first time measured the elements of insurance that are important to consumers and how those related to their value set. This was of critical importance as it gave us a means to benchmark our delivery of the Charter purpose – by better understanding consumers. Through an exhaustive process of interviews, video diaries and other qualitative techniques, the researchers found that trust in insurance is made up of nine key ideas about ‘what good looks like’ – both in terms of competent service and ethical standards.
The research then measured trust in insurance against each of these building blocks of trust, through a survey of 1,000 consumers and 1,000 small businesses.
We promised to update the Index every year, to show how trust in insurance was evolving. The 2019 edition of the Trust Index showed that in the motor, travel and home insurance markets, consumers’ experiences of making a claim are significantly more in line with their expectations than they were a year ago.
This was true of the speed with which their claim is processed; the amount of respect shown to them by their insurer throughout the process; and the amount of control they have over their lives while their claim is being paid.
The area which shows the biggest gap between expectations and performance is still the way in which insurers reward customer loyalty. The gap has increased from 7.64 last year, to 9.1 this year.
We have increased the granularity of the information available, with firms now able to drill-down into the online results and gain more detailed feedback.
Dr Matthew Connell, Director of Policy and Public Affairs for the CII, said, “Last year, we highlighted the impact that renewal pricing was having on consumer trust. Since then, the insurance sector has implemented the Association of British Insurers/British Insurance Brokers’ Association Guiding Principles and Action Points for General Insurance Pricing, and there has been an encouraging amount of high-profile marketing activity promising existing customers that they will be treated fairly.
“This means that insurers have increased awareness of the issue of rewarding loyalty, but that perceptions around performance have not changed yet. We expect that as the actions taken by insurers to reward existing customers for their loyalty take effect, the rating around this crucial aspect of trust will begin to increase. This experience underlines the fact that once trust falls, it takes a long time to rebuild it.”
FCA discussion paper – transforming culture in financial services
On 5th March 2020, the Financial Conduct Authority (FCA) published its discussion paper, “Transforming Culture in Financial Services: Driving Purposeful Cultures”. It contains a chapter written by Sian Fisher, CEO of the Chartered Insurance Institute, with the support of a working group of individuals from across the profession on the role of purpose and culture in general insurance.
The key theme of the essay is that to improve public trust, the entire general insurance profession needs a purposeful culture centred around serving the whole customer. This means producing services for individuals and organisations that are relevant to all the risks they face, whether they are insurable or not.
The essay sets out the role that key initiatives such as Corporate Chartered status and the CII’s Inclusive Financial Lives pledge can contribute to this culture. It also shows how insights from the Public Trust Index can help build a rigorous focus on improving consumer outcomes, that is key to a better culture.
All party parliamentary group – insurance and financial services
There are signs that the Public Trust Index has not only proved a useful tool for the profession and the CII to understand trust levels but it has also enabled the CII to place themselves and the needs of the public at the centre of the debate, and to then work collaboratively with other interested parties to improve trust levels. Another good example of this is the fact that, during the year, the CII were asked to take on the secretariat of an all-party parliamentary group on insurance and widen it out to include financial services.
There are also a number of other initiatives launched in 2019 where the CII are leading the profession:
Insuring Women’s Futures pledges
As one of the outputs from our work on Insuring Women’s Futures, we are encouraging employers in the insurance and personal finance sector to sign up to two pledges – the Financial Flexible Working pledge and the Inclusive Customer pledge – and commit to showing leadership in support of financial resilience. Although a number of the examples focus on women, these pledges are easily applicable to other societal groups such as the elderly. To date, 20 major insurers and financial services companies have signed up to the pledges. These support the new Chartered ethos, launched following consultation last year, where not only should firms and the CII work to nurture knowledge but also to improve client centricity and thereby serve society.
Good practice guides
As part of our commitment to improving public trust, we are publishing a rolling programme of good practice guides around content relevant to our members, with recommendations of how to operate appropriately and examples of activity that have worked for other members. The content is driven by the Society boards and we often work with a subject matter specialist in a particular field to pull the guide together.
Pension Transfer Gold Standard
The Gold Standard is a voluntary code of good practice for safeguarded and defined benefit pension transfer advice, based around a set of principles. Firms can adopt and promote this standard and principles, so consumers can better understand and find good advice, and be confident they are dealing with a firm that is going beyond minimum requirements when giving financial advice. Any financial advice firm can adopt the Gold Standard, regardless of which accredited body they are a member of.
In addition, we have partnered with Scope – the disability equality charity – to develop guidance on reporting and developing a diverse, inclusive working environment for people with disabilities; continued our work with Mind by launching a guide for the insurance profession on managing mental health in the workplace; and maintained our support for various pro-bono initiatives such as My Personal Finance Skills, which delivers financial education workshops to schools and colleges across the UK through a network of Education Champions and aims to be the largest programme of its type in the UK.
To improve public trust the entire general insurance profession needs a purposeful culture centred around serving the whole customer
Pension transfer gold standard principles
1. Helping clients understand when advice is appropriate.
2. Ensuring advice given supports the client’s overall wellbeing in the context of their stated objectives.
3. Ensuring client understanding and acceptance of all charges.
4. Ensuring the most appropriate and updated technical skills are applied.
5. Transparent management of conflicts of interest.
6. Helping clients understanding the cost of transferring benefits.
7. Avoiding unregulated investments and introducers.
8. Transparency in advice processes and outcomes.
9. Promoting the Consumer Guide to the Pension Transfer Gold Standard.