Act now to restore trust, insurers urged

In response to growing concern among SMES about policy exclusions, the Chartered Insurance Institute is urging insurers to take action to restore trust in the profession.

The CII’s own Public Trust Index for April suggests SMEs that had experienced little financial impact due to coronavirus restrictions were still focused on the same issues as before lockdown – the most important of which was renewal pricing.

SMEs that had been somewhat impacted by the crisis were concerned about how the policy had been explained, suggesting a dissatisfaction around levels of transparency and the quality of advice given.

And businesses that had been significantly impacted report a need for immediate assistance around their claim and to know that the policy was going to address their needs; they wanted more “clarity of language” from their insurer.

Dr Matthew Connell, director of policy and public affairs for the Chartered Insurance Institute, said: “Firms that are affected by coronavirus are becoming more concerned about exclusions in their own policies, especially around liability and property insurance.

“If we, as a profession, don’t rise to the challenge of improving understanding among SMEs, we risk moving into a ‘forced trust’ position where they no longer trust that the policy will protect them adequately but continue to rely on it because of a lack of other alternatives.

“SMEs understand the value of insurance, but they want a better conversation about how to manage risks. The way in which insurers manage the effects of the coronavirus is going to have a lasting impact on trust in the profession, especially for SMEs, who have a higher level of dependency on their protection during significant business interruption.”

The CII's poll was conducted among 1,000 consumers and 1,000 small businesses from across the UK.

Restoring trust: A three pronged approach (Source: CII)

1. Find better ways to address the issue of renewal pricing. Initiatives, such as the ABI/BIBA Guiding Principles and Action Points for General Insurance Pricing have resulted in a gradual improvement SMEs perception of how insurers reward loyalty. However, renewal pricing is still SME’s biggest concern. They want more reassurance about the specific measures insurers take to ensure existing clients are treated fairly compared with new clients.

2. Improve advice processes (and non-advised buying processes) to ensure clients understand both the insurable and non-insurable risks that they face, and what they can do about each one.

3. Reach negotiated claims settlements wherever possible. There is still scope for firms to reach agreements with clients about the level of assistance they can give. Assistance given at an early stage will build more trust than compensation given at a later date.

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