Competitive prices ‘may not be best route to building trust’ with motorists

Motor insurers winning customers through price “may not be the best route to building trust”, according to Fairer Finance.

The firm’s insurance index, published today (21 November 2024), showed that motor insurers with a higher reputation were securing larger trust scores with the public.

For example, while only 17% of motorists chose NFU Mutual due to price, 44% went with the insurer due to its reputation, resulting in a trust score of 76%.

Meanwhile, some 46% of consumers chose One Call Insurance because of price, while 6% considered its reputation. This resulted in a trust score of 44%.

In turn, Fairer Finance said “motor insurers that compete more on price seem to have lower levels of trust than brands that are chosen for their reputation”.

Trust 

Fairer Finance released the table as it revealed that trust in motor insurance was dropping across the industry.

Among reasons for this is price, value for money and fees and charges, with these receiving net satisfaction scores of -43%, -49% and -47% respectively.

The insurance index also revealed that claims experiences were denting consumer confidence in motor insurers.

For example, those who say they distrust their motor insurer had a net satisfaction rate of -56% when it came to making a claim on their insurance in the last three years.

This comes after the Financial Ombudsman Service (FOS) said it was expecting to receive nearly 50,000 insurance complaints during the 24/25 financial year.

It said the top three reasons for complaints included claim decline (41%), claim delay (23%) and claim value (8%).

James Daley, managing director at Fairer Finance, said: “The turmoil in the car insurance market over the past few years is continuing to take its toll on the reputation of the sector.

“Although rising prices are the biggest driver of consumer dissatisfaction, there’s also a growing number of customers getting a poor experience at claims stage – as insurers try to save on costs.

“Complaints to the Ombudsman have been rising and disappointingly, the percentage of cases being upheld in favour of the customer has also risen sharply.”

He added: “It’s time to take a step back and look at how to build a fairer market that provides affordable access to insurance for all consumers.

“This is a critical moment for the industry to take meaningful action and restore faith among policyholders.”