Protection providers should use technology to help engage with customers, increase trust and improve their products, according to a report by EY.
The study, based on a poll of a nationally representative sample of 1,000 people, looked into what consumers thought about the insurance industry and how their needs could be better met.
Findings in the report showed the majority of consumers did not trust the protection industry — 55 per cent of insured consumers and 68 per cent of uninsured people thought providers were looking for loopholes to avoid paying claims — and more than 42 per cent perceived it as a waste of money.
Affordability was also a key issue, as more than 40 per cent of those without insurance said they couldn’t afford cover while 25 per cent said other day-to-day outgoings were more important.
Clive Allison, UK insurance protection leader at EY, said the perceptions surrounding trust and value for money were the most significant findings of the study.
But, he added, the research had highlighted how the intelligent use of technology, data and analytics could help engender trust and improve customer engagement with the industry.
Mr Allison said: "There are real opportunities – using current tech innovations – to improve interaction with, and empathy towards, customers and improve their overall experience.
"However, to make the most of these opportunities, a shift in focus is needed – away from educating people about complex protection products to designing simple protection services that customers need and want.
The study found that using personal data could help drive new products and services, although it was vital such information was handled with care by providers, so as not to breach data protection laws.
More than a quarter of those polled — 28 per cent — said they were happy with their fitness data being used by a firm and the report said this data, combined with technology such as activity trackers and health monitoring devices, could help customers evidence healthy lifestyles.
This could give consumers access to cheaper, better cover and give them the assurance that such data was stored with the provider and was irrefutable.
The study also showed that 65 per cent of consumers thought it was important that their protection policy could "travel with them through life".
This means customers wanted a policy that could be dialled up or down as needed and in particular, consumers liked when they were in control and could make alterations when their circumstances changed, such as moving house, an income increase or employment change.
The report stated technology, and particularly predictive analytics, could help identify these customers and improve their experience by making the services more relevant to them.
EY said using predictive analytics in this way could also help build trust from clients by flagging when they might have shortfalls in cover.
Another way technology could help providers was to use it to move away from the concept of selling a financial product and towards providing customers with an ongoing service.