Insurers have been told to improve their client communications after Carolyn Fairbairn, director-general of the Confederation of British Industry, warned trust in the sector has crumbled after a turbulent year.
Speaking at the ABI annual conference earlier today (February 26) she said the financial services industry had seen the steepest decline in confidence in the first few months of this year since the financial crash.
Also speaking at the conference Amanda Blanc, chief executive of Europe, Middle East and Africa at Zurich, said insurance companies were still perceived as less trustful than banks, despite the fact they did not stumble during the financial crisis.
But Ms Blanc pointed to faults in client communication as to the cause of most dissatisfaction with insurers, rather than the actual product.
The chairwoman of the Association of British Insurers said insurance companies did "quite well" during the financial crash of 2007, but the sector was still plagued by a lack of consumer trust.
Ms Blanc said the insurance industry had "some work" to do in improving customer perception, listing the lack of trust in the market as one of the ABI’s main concerns.
The trade body has also prioritised the sustainability of the sector’s workforce, diversity in the market and inevitably the impact of Brexit on consumers, Ms Blanc said.
Changes have already been made by pension providers to the documents they give consumers, after a two-year industry initiative to make pensions language simpler, clearer and more consistent came to an end last April.
The changes were prompted by a guide called Making Retirement Choices Clear, launched by the ABI in 2016, and have been made visible to customers through a number of engagements, including written communications, web pages and in the language used in conversations over the phone.
But it appears this did not stretch to the rest of the insurance industry.
Ms Blanc said: "I see on a day to day basis 99 per cent of claims being paid by insurers, what we are poor at doing is telling the public that is the case.
"People are way more interested in a situation where a claim isn’t paid or not done on time.
"Do we make it complicated for customers? We do. Claims should be paid instantly, it should all be done instantly, we need to get much better at that."
Ms Blanc added: "I speak to customers who have complained and the vast majority of times it’s not something we’ve done wrong, it’s the way we have communicated it.
"It’s more that the client does not understand because we’ve made it so complicated. We don’t talk to customers in a language that they understand, it’s too complex, and we need to get much better at that.
"I think that’s a fundamental issue for us."
rachel.addison@ft.com
