July 8, 2019
Do Consumers Trust Their Agents?
by Bill Wilson
Recent studies contend that consumers don't trust insurance agents, but the research misses a crucial point.
I just read this article, which includes this:
“According to an Accenture study, only 27% of consumers consider insurers to be trustworthy. And Deloitte found that only 11% of people have strong trust in insurance agents and brokers.”
I’ve seen studies like this over the years. What is usually missing from these statistics is the Q&A related to the insurer or agent OF the consumer. If you ask consumers if THEIR insurance agent is trustworthy, the numbers are almost always WAY higher than those above.
The same is often true of politicians…when the question just refers to “politicians,” polls imply that they are universally despised, But ask people what they think of a politician they voted for and the statistics are completely different.
As has been said, “Torture numbers, and they’ll confess to anything.”
The driving force behind insurance policy evolution is litigation and regulation where the difference in coverage, according to the courts, can be the tense of a verb or a punctuation mark.
See also: Insurtech and the Law of Large Numbers
Berkshire just came out with a policy called “THREE” that combines property, business income, general liability, auto, professional liability, workers’ compensation and cyber liability (I’m probably forgetting something) insurance…IN THREE PAGES. And it’s going to be clear to business owners what is or isn’t covered?
Inarguably, the most important “customer experience” is the one that takes place at claim time. Insurance policies are complex, legal contracts whose terms and conditions have often been interpreted over decades. And the reality is that virtually no consumers read them…. Far too many insurance practitioners don’t even read them. I doubt that reducing dozens of pages to two to three pages will change that metric. When it comes to making contracts understandable, less is not necessarily more.
By the way, there is no such thing as “fine print” in regulated insurance policies.