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11 January 2024

WEBINAR: Customer Experience yet to improve in the age of Consumer Duty 

Our latest webinar, hosted in partnership with Trustpilot, discussed the drop in customer experience that was revealed as part of the 2023 Insurance DataLab Customer Experience Report.

The webinar also discussed everything from the impact of Consumer Duty, through the importance of technology, and the threat of regulatory action from the FCA. 

You can watch the session in full below or read on for a quick summary of some of the main talking points. 

David Williams, non-exec director at Freedom Services Group, said he was surprised by the findings – but not because he was expecting customer experience to have improved. 

“I thought it would have been a bigger drop,” he said. “That’s based on conversations I’ve been having with insurers and brokers. They say that they are not getting the service they require, particularly when it comes to claims.” 

And compliance expert Claire Carpenter said she had noticed a particular issue with those insurers with delegated claims authority. 

“I’m seeing insurers really struggling to get things like benchmarking and NPS scores from TPAs [third party administrators],” she said. “That is particularly becoming an issue when you view it in and around Fair Value.” 

Williams said he was also particularly concerned by the high upheld rates that shone through in Insurance DataLab’s analysis of Financial Ombudsman Service (FOS) complaints figures. 

“[A high upheld rate] is a massive failing on the part of insurers,” he said. “They ought to know what an ombudsman’s decisions is going to be, and they should be adapting their processes and best practice guides and responding accordingly.” 

Williams did note, however, that sometimes it is difficult for insurers to manage their wordings, particularly with the approach the FOS is taking with its decision-making. 

“I get the impression that the ombudsman is seeing itself even more as a consumer champion, and frankly some of the decisions don't make legal sense,” he said. “But then maybe it is less about legal sense, and more about customer expectations. 

“The problem there is that customer expectations after something's already happened [such as a claim event], are often much higher than they probably were at the time the policy was taken out.” 

Consumer Duty not having desired effect 

Many in the industry had hoped that the new Consumer Duty regulations would help improve these customer outcomes, but Carpenter said that unfortunately she has not seen any evidence of this yet. 

“I had hoped this would be a turning point for some of the things I found frustrating through my 20 odd years in insurance [but that’s not been the case],” she said. “People are not getting the right management information, they're not analysing it, and it's not feeding up through the chain to inform decision making – and that's really disappointing.” 

Carpenter added that the frustrating aspect of this is that often the data exists, it’s just not being accessed in the right way by the industry. 

“One of the things that Insurance DataLab does very well is enable people that are doing product assessments or monthly conduct committees to use that data,” she said. “[Having it all] in one place really makes you able to pull a broader picture together.” 

It is not all doom and gloom however, with a number of companies excelling in the customer experience they are offering to their policyholders. 

And Trustpilot’s Graham Wilkinson said the review platform had been seeing increased engagement from the insurance industry – something that is a positive sign for the future as it allows insurers to learn from customer feedback. 

“We've seen more [insurance] businesses being reviewed over the period of the last 12 months versus the previous 12 months, which for us is a positive,” he said. “It basically means that there is more of an appetite for consumers to actually give their feedback, and there is more of an appetite for businesses to ask for it.” 

Find out how Insurance DataLab can help you better understand customer outcomes by requesting a free trial of our market intelligence platform 

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