Over half (56 per cent) of consumers still do not trust insurer claims stats, with this rising among older people.
This is the third consecutive year that the Association for Mortgage Intermediaries has found this, having spoken to 3,000 UK adults and over 250 advisers.
People said on average they believe just 72 per cent of life insurance and 60 per cent of income protection claims are paid.
In reality, much closer to 95 per cent of claims are paid on average by major insurers.
The research also found that advisers (86 per cent) think lenders, the regulator, consumer groups and the government should do more to promote protection among consumers.
AMI’s chief executive, Rob Sinclair, said he wants to bring the industry together “to take stock of what’s working well and what isn’t”.
The AMI has come up with a five-point plan to help.
The first point is for advisers to consider whether they clearly and confidently articulate the value of protection advice to consumers.
“Advisers should be clear to consumers on the cost of advice vs the benefits the consumer receives from the advised route and to shift overall protection conversations away from price to price and quality,” he said.
Other points included:
- Firm/network principals to consider their approach to protection in light of the FCA [Financial Conduct Authority] consumer duty and feed AMI Viewpoint findings into their consumer duty work;
- Providers to commit to working with advisers to understand the pain points and seek to address them where possible, to help advisers’ confidence when discussing medical conditions with customers;
- Providers to consider ways they can implement claims statistics and widen the use of case studies, such as by sharing customer views on their experience of the claims process;
- AMI to work with its protection specialists group, as well as insurers Royal London, L&G and the wider industry to develop thoughts on how we can tackle the barriers.
Sinclair said he wants to “champion change” and work together as one industry to “shift the dial”.
His organisation’s research also found that for a third year in a row, half of consumers (50 per cent) still believe commission is a broker’s main motivation if they suggest protection.
Over a third (35 per cent) of consumers also perceive affordability as a barrier to protection, rising to almost half (48 per cent) of those aged 35-44.
Alongside this, almost a third (30 per cent) of younger people (18-34 years) think they are “too young” for protection.