ABI: Insurance industry has improved customer outcomes but has further to go

ABI: Insurance industry has improved customer outcomes but has further to go

ABI: Insurance industry has improved customer outcomes but has further to go

Speaking at the Insurance Times Forum, Challenges for 2010 and Beyond, Stephen Haddrill, the ABI’s Director General, said:

“We have come a long way in improving customer outcomes. We have been competitive and innovative to the customers’ great advantage. But we have further to go.

“The risk in recession is that customer satisfaction will not improve as the focus on costs intensifies. As you know, fraud is increasing. Detected fraud increased in volume by 17% between 2007 and 2008, with in excess of 100,000 cases detected. The industry is bearing down on those it suspects. Rightly so. The challenge is not to alienate the honest customer in doing so.

“Other risks are rising too and bringing new challenges for the relationship with customers. The greater risk of unemployment was pushing up rates for mortgage payment protection insurance earlier this year, to the dissatisfaction of the regulator.

“And the search for new customers in a stagnant market makes existing customers wonder what is going on. The word on the street is that it is always better to switch. That creates a challenging market. Why, I am asked, does the industry not put as much effort into loyalty and retention as into switching? Now I know many do but that is not how it seems out there.

“And of course the growth of price comparison through the internet has intensified the focus on price. The FSA is asking more and more questions about the websites. As always their concern is about customer expectations. The internet policy and the policy sold over the phone by the same firm are not always identical. Why should they be if one is cheaper than the other? Because the customer expects them to be the same.”

Notes

1.Enquiries to:
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2.The full text of Stephen Haddrill’s speech is available on the ABI web site, www.abi.org.uk.

3.The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK’s capital. They are the risk managers of the UK’s economy and society. Through the ABI their voice is heard in Government and in public debate on insurance, savings and investment matters.

4.An ISDN line is available for broadcasts.

5.More news and information from the ABI is available on our web site, www.abi.org.uk.