Industry has work to do to regain customer confidence – Zurich

Following the FCA’s High Court test case exploring the interpretation of business interruption (BI) policy wordings when applied to Covid-19-related claims, “there is some work for the industry to do in terms of regaining customer confidence”, said David Martin, head of retail at Zurich Insurance UK.

Speaking exclusively to Insurance Times, Martin confirmed that “the pandemic’s been quite damaging for the industry as a whole in terms of clarity and in terms of understanding from end customers”.

In particular, Martin highlighted “some of those real challenges or nuances within property insurance, where clearly everyone understands that property damage is what the policy is covering”.

However, “various different wordings on the market created some challenge”, he added.

This “challenge” formed the basis of the FCA’s High Court action, which was heard by judges virtually at the end of July - Zurich was one of the eight insurers involved in the proceedings.

The case’s judgment was published in September – although yielding mixed results depending on different aspects of the reviewed policy wordings, the High Court primarily sided with the FCA to rule in favour of policyholders.

Zurich, however, was able to take a positive result from this. Martin explained: “We welcomed the test case to bring clarity to customers as quickly as [possible].

“We volunteered to partake in that case to make sure that our wordings being questioned were clear and it’s on the record that our wordings were found to not be misleading and were found to be very clear in statement and in their application.”

It is for this reason that Zurich has not appealed the High Court judgment and will not be participating in appeal process, which is being heard at the Supreme Court this week (16 November).

Navigating responses

Following the High Court judgement, Zurich “responded to customers very quickly in terms”, Martin said.

“We’re in a position where the claims that were clearly covered, we’ve paid very quickly. That’s exactly the right thing to do.

“So, where they were covered, they were paid and where they were not covered clearly, we had discussions with the broker and the client involved to make sure that we could give the best possible service we could, but also assist the client in risk management and how they will move their way forward.”

Commenting on the Supreme Court appeal hearing, Martin said “there will be the appropriate oversight and deep dive in various aspects”.

He added: “Clearly, we’re not involved in the further test case now and we are now concentrating on serving our customers and making sure we bring clarity and we get those claims paid.

“The Zurich brand and the Zurich company, we do the right thing. That’s in our DNA.”

Work to do

Martin acknowledged, however, that “as we come out of this, there is some work for the industry to do in terms of regaining customer confidence. I think we’re absolutely all aligned to that”.

He continued: “We do believe we’ve delivered [a] very good service and very good flexibility to our customers and over time, we’re confident that the stability the insurance market provides to industry in the UK will continue.”

Part of the solution here, according to Martin, “is to deliver much simpler customer offerings with far more complexity behind, making them simple in the front end” – this can work to improve customer understanding when purchasing insurance, while still delivering a high-quality product.

“It’s always great to talk about simple customer journeys – those simplified journeys involve an awful lot of external databases and an awful lot of digital work and database work to enable that to happen. It’s how we start to marry those two things together [that] becomes vitally important,” he explained.

“Digitisation and where we go with digitisation and what that means for our market and how you serve customers with complexity, with simplicity at the front, I think is fascinating and I think you will see this market move substantively and you’ll see a pace of insurers looking very different. That’s the skill now.”