In the insurance industry, “trust” is more than a shared concept; it’s a goal tied to business development, strategy and execution. Yet, according to a recent study, only 48% of consumers in the U.S. and the UK trust their insurance provider.

The study, commissioned by Pitney Bowes Business Insight and conducted by the ESCP Europe Business School, targeted 1,000 consumers each from the U.S. and the UK to gain feedback on topics related to such things as insurance, banking and mobile technologies.

The results of “The Role of Trust in Consumer Relationships” demonstrate a need for increased customer-centric communication across all channels in order to develop higher levels of trust, notes Bill Sinn, strategic marketing director, Pitney Bowes Business Insight. “To use a somewhat antiquated term, we are faced with a new paradigm,” Sinn told Insurance Networking News. “Because it’s hard for insurers to address digital communications with their customers. Many still operate with siloed systems that don’t lend themselves to seeing the customer from a 360-degree view."

The research results hint at the 360-degree view as a requirement for establishing trust as an overall means to an end. “This preoccupation with consumer trust results from the recognition that trust leads to beneficial outcomes,” say the report’s authors. “Trust is key in guaranteeing the success of business relationships, particularly those characterized by high degrees of risk, uncertainty and vulnerability, like services.”

For service businesses, especially ‘service-rich’ organizations that have multiple customer contacts or touch points, this issue is even more critical, claim the author's of the report.

As a primary service business, banks epitomize multiple touch points, and not surprisingly, ranked higher, at 57 percent, than insurers in garnering customer trust, according to the study.

"One of the major struggles for the insurance industry is commoditization and customer churn," said Sinn. "The key to addressing these issues is creating a dialogue with customers that is consistent, reliable and creates a relationship that extends beyond the policy renewal date."

Other key findings from the report include:

• Only 41% of respondents trust insurance companies to do what is right.

• 45% of customers believe that, if they shared their problems with their insurance provider, they would receive a caring response.

• 47% said they trust self-service technologies like e-commerce platforms and online accounts.

• In addition, only 53% answered positively about their insurers when asked whether they feel satisfied with the treatment, the relationship and service they receive.

“I’m not sure how many carriers truly have a digital communications strategy as it relates to all customers, including agents, customers, third-party administrators, partners, auto shops, and so on. Many have been using a band-aid approach, not looking at the whole systems approach,” Sinn said.

Yet the impetus is clear: According to the survey results, respondents believed that improving customer communications would have the greatest impact in terms of developing trust. In fact, consumers in the study said that higher levels of quality, clarity and transparency would be most helpful in communications from their insurance provider. Additionally, respondents said that they look for companies that provide high-quality service and demonstrate a high level of competency and conduct from employees.

The survey arrived at these results by first defining trust based on evaluations of three complementary dimensions--competence/credibility, integrity/honesty, empathy/benevolence.

“Credibility and integrity loom largest in an insurer’s front office strategy,” notes Sinn. “Carriers have worked on these efforts for years. The harder part is empathy, because agents are in between some of these communications, and customers still want a personal touch. The agent might have one or two communications all year with the customer, and having that communication with the agent builds trust and loyalty.”

Another element is clear: connecting with customers in order to provide high-quality service and/or competency is a struggle, as those customers represent a moving target, lured to the digital world via self-service, social media and other digital channels.

“I think there will be a little bit of a shakeup in the industry,” admits Sinn. “Social media is a complex area ripe with potential, yet carriers are asking ‘how do I address this.'"

Sinn notes that carriers can build trust by dealing with the vast amounts of unstructured data at their disposal. “With the advent of social media, carriers are trying to evaluate how they can capture more of this data and use it to build better relationships with their customers. Meanwhile, people want the Amazon-like experience – transparency of information, across many channels. Remember, CRM used to be one-to-one and one-to-many – now it’s one-to-multi-channel. It’s a brave new world, but we are getting there.”

To access the full report, click here.

-- This article first appeared on Insurance Networking News.


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