This comes shortly before insurance firms must prove compliance with the Duty at the first annual board reporting deadline on 31st July 2024, uncovering areas for improvement in the insurance industry’s adaptation to the new regulation.
Despite Consumer Duty’s aim being to ensure better customer care, NTT DATA UK&I’s research shows that, while 99% of consumers feel that their insurance needs are met to some extent, 46% remain neutral or unhappy with their policies. 47% of insurers only reach out to their customers annually, potentially contributing to a sense of dissatisfaction among policyholders. Furthermore, customer trust is alarmingly low, with 48% of consumers expressing doubt that their insurer has their best interests at heart.
Key takeaways:
• Only 45% of consumers felt communications from their provider were somewhat tailored to their needs, with 40% finding them to be generic, highlighting a gap in personalised customer service.
• Only 28% of consumers have taken out new policies in the past six months, indicating barriers to product uptake or a lack of attractive offerings.
• There are some concerns around AI, with 17% worried about losing personal interaction and 18% doubting AI’s ability to manage complex claims.
• 42% are willing to share more data for better experiences, while 34% remain hesitant about data sharing.
• 29% of neurodivergent individuals face difficulty obtaining necessary policy information compared to 18% of non-neurodivergent individuals.
The Consumer Duty Act aims to revolutionise customer care in financial services by mandating firms to secure positive outcomes for customers, ensure products and services meet policyholder needs, and deliver clear benefits through fair, transparent, and supportive practices. However, NTT DATA UK&I's survey of 2,000 UK consumers depicts a gap in expectations between regulatory intent and customers’ experiences.
"Our latest research paints a stark picture of an industry at a crossroads," said Deborah Bale, Head of General Insurance & Broking at NTT DATA UK&I. “The requirements outlined in the Consumer Duty Act require a conscious commitment, but they also offer an unprecedented opportunity to redefine what insurance means to consumers. The insurers who will lead the industry into its next chapter are those who can balance innovation with customer understanding. We're looking at a future where data-driven personalisation and AI aren't just buzzwords, but the bedrock of rebuilding consumer trust.”
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