Insurers’ response to COVID-19 pandemic has damaged their reputation, finds GlobalData

A recent poll by GlobalData has revealed that the reputation of the insurance industry globally has taken a hit due to its response to the COVID-19 pandemic. The poll found that almost a third (29%) of respondents felt that their opinions on global insurers had substantially worsened because of the pandemic. A total of 41% felt insurers’ reputation had worsened, while a total of 31% felt it had improved. The leading data and analytics company notes that while the difference is significant, but not huge, in terms of overall positive and negative sentiment, the ‘substantially worsened’ response is by far the largest non-neutral response.

Ben Carey-Evans, Insurance Analyst at GlobalData, comments: “The pandemic has undoubtedly been an extremely difficult situation for insurers. Claims in some lines have soared and a lot of lines have become hard to insure. The biggest factor behind the industry’s reputational damage is likely to be the legal battles around business interruption claims throughout 2020. For example, in the UK, leading insurers were taken to court by the FCA as they refused to pay-out claims. They argued that a pandemic was not covered in the majority of policies. They ultimately lost, but the dispute and delay in paying will have caused some damage.

“Other things, such as customers struggling to find cover for certain lines, such as travel, or income protection, is also likely to have contributed. Consumer trust has always been a key issue for insurers, and an area where they have struggled. Therefore, they cannot afford further reputational damage. The key going forward has to be transparency, and to make sure that no matter what COVID-19 based policies they are selling, the terms are very clear to consumers, to avoid further disputes.”

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