Two thirds of consumers find insurance too confusing
-Co-op Insurance trial launches new tool to demystify pricing for customers-
- 66% of people find insurance too confusing
- 36% of consumers don’t understand how their insurance is priced
- 27% of people don’t understand why the price of insurance varies annually
Two thirds of consumers (66%) find general insurance too confusing and a third (36%) don’t understand how their insurance is priced, according to new research from Co-op Insurance. *
Almost three quarters (72%) of consumers don’t believe their insurer tells them enough detail about how the money they pay for their insurance is used. In response to this, Co-op Insurance has developed a new tool to explain how insurance pricing works, to improve transparency for customers.* *
As part of the new trial, approximately 10,000 customers have received clear information about how insurance premiums are calculated using a range of digital diagrams.
The guide explains where the money that customers pay for their premium goes. As more than a quarter of people (27%) don’t understand why the price of insurance may vary from year-to-year, importantly, it also clearly explains the reasons why premium prices can fluctuate annually.
It also explains the possible consequences of certain types of claims made, for example how much a fire claim would cost. Responses from customers throughout the trial will be used to shape the tool and initial feedback received from the pilot scheme to date, indicates that the majority of customers have found the tool useful.
James Hillon, Products and Pricing Director at Co-op Insurance, said:
“The research findings show that people are not just confused about where their money goes when it comes to insurance, but that they do have an appetite to know more. We are looking at a range of options to explain how insurance pricing works to deliver information to consumers in more effective and easy to understand ways. At Co-op Insurance we are committed to doing the right thing for our customers and believe that developing this tool is just the starting point on the journey to improving transparency.
“As a responsible insurer, we feel it is important to engage with customers throughout their policy life with relevant solutions rather than just at point of claim and to focus on fairness and simplicity. We believe our new guide is a step in the right direction.”
Notes to editors – For media purposes only
*Research conducted by One Poll on behalf of Co-op Insurance among 2,000 UK adults online.
**Home insurance customers who have a policy coming up for renewal will be contacted to tell them about the tool.
As part of the transformation of Co-op Insurance, colleagues were challenged to present original ideas to the insurer’s Executive team that would ultimately benefit customers and support the business in becoming a more innovative insurer. The idea for the guide was created by colleagues from the business’ actuarial and technical services team.
About The Co-operative Insurance
The Co-operative Insurance is a UK-based General Insurer that operates principally within the personal lines segments of the Motor and Home Insurance markets. The Co-operative Insurance underwrites the majority of business written, supplemented with some small lines of business where The Co-operative Insurance acts as a distributor or has a 100% reinsurance arrangement in place.
With more than 1.18m customers, The Co-operative Insurance is committed to ‘Doing the Right thing’ and always strives to treat customers and members fairly. The Co-operative Insurance pioneered the way in lowering the insurance premiums of Young Drivers as the first major insurer to launch a pay how you drive telematics insurance product for young drivers in 2011. Since launching the scheme, The Co-operative Insurance has saved its young drivers more than £7.2 million in their first year of driving.
For more information contact:
Press & Media Relations Manager – The Co-operative
0161 767 4354/07770 441828
Press & Media Relations Manager -The Co-operative
0161 767 4281/07540 641368