A recent poll conducted by data and analytics company GlobalData shows a decline in the insurance industry’s reputation globally, resulting largely from its response to the COVID-19 pandemic.
A third of respondents felt that their opinions on global insurers had substantially worsened because of the pandemic.
Overall, a total of 41% felt insurers’ reputation had worsened, while a total of 31% felt it had improved.
GlobalData notes that while the difference is significant, in terms of overall positive and negative sentiment, the ‘substantially worsened’ response is by far the largest non-neutral response.
“The pandemic has undoubtedly been an extremely difficult situation for insurers. Claims in some lines have soared and a lot of lines have become hard to insure,” said Ben Carey-Evans, Insurance Analyst at GlobalData.
“The biggest factor behind the industry’s reputational damage is likely to be the legal battles around business interruption claims throughout 2020.
“For example, in the UK, leading insurers were taken to court by the FCA as they refused to pay-out claims.
“They argued that a pandemic was not covered in the majority of policies. They ultimately lost, but the dispute and delay in paying will have caused some damage.
“Other things, such as customers struggling to find cover for certain lines, such as travel, or income protection, is also likely to have contributed,” Carey-Evans added.
“Consumer trust has always been a key issue for insurers, and an area where they have struggled. Therefore, they cannot afford further reputational damage.
“The key going forward has to be transparency, and to make sure that no matter what COVID-19 based policies they are selling, the terms are very clear to consumers, to avoid further disputes.”