Do customers trust their insurers?

September 24, 2024 4:55 PM

Erin Slater, head of financial services strategy with Quad, shared her insights in an email interview with Digital Insurance on how emerging technologies impact consumers' trust and relationships with their insurers.

How has technology impacted consumers’ trust of their insurers?

From Gen AI dupes to sophisticated phishing scams, the ongoing emergence of technology disruptors can create fear, uncertainty and doubt for consumers. This state of general distrust can impact how consumers perceive their experiences in a variety of industries and can erode their relationships with brands.

This trust deficit is especially significant for financial service segments such as insurance, where consumers trust a brand with sensitive personal data and rely on them for support at their most vulnerable moments. Yet this technological turbulence is coming at a time when insurance consumers are also experiencing increased costs, changes to their benefits, and widespread confusion about coverage and processes due to arcane language and systems.

The convergence of these factors can leave insurance brands wrestling with a significant trust deficit with their consumers. The J. D. Power 2024 U.S. Auto Insurance Study indicated only 15 percent of auto insurance customers had high levels of trust in their auto insurance.

How can insurance companies continue to deliver innovative technologies that meet consumer expectations and stay current with the evolving digital landscape, without causing customers to feel uncomfortable or concerned about privacy?

Collection and use of personal data – as well as perception of its misuse – are top issues for insurance brands, which are challenged to balance consumer expectations for innovative technologies that provide ease, convenience and personalization with regulatory considerations. Insurers must be particularly sensitive about how they market to consumers who are turning to them for help at some of the most critical times in their lives – like buying a new home, having a child, or managing health care issues. Key to success is collecting only information that is necessary and using it to enrich consumers' brand experience with data-driven communications that are relevant and useful.

While data security is a driving factor in technology advancements, insurance brands should also prioritize a seamless user experience that is consistent across channels. Emerging AI tools can help. Used adeptly, they can create highly personalized content at scale across multiple marketing channels. The EY Global Insurance Outlook cautions, though, that a clear policy about use of AI tools will be important for building brand trust, especially given that sensitive personal data is involved.

How can carriers effectively build relationships or rebuild trust with their customers? How can thoughtful use of data and personalization help?

Building trust starts with authenticity. Brands that articulate clear values and demonstrate that those values drive their actions and communication with consumers experience stronger consumer trust and loyalty.

Creating trust also requires transparency. If consumers are asked to provide a brand with personal data, do they understand what the data will be used for? If rates are increasing, is the brand taking the time to explain why?

A strategic, multichannel approach can also help insurance brands win over consumers. Coupled with digital marketing, direct mail—while dismissed as outdated by some—is a powerful way to foster trust, increase brand loyalty, and improve brand recall.