Insurance Industry Urged to Enhance Trust and Diversity
The insurance sector must take further steps to earn public confidence, according to Hannah Gurga, director general of the Association of British Insurers (ABI). She addressed the Treasury Committee during an evidence session focused on financial inclusion, which also featured representatives from the banking industry.
Building Confidence Through Transparency
Gurga emphasized that gaining trust is a primary objective for the ABI and its members. "I believe as an industry we have to do more to gain people's trust," she stated. Efforts include increasing transparency in how premiums are calculated and ensuring customers have positive claims experiences. She highlighted the industry's commitment to accurate and fair pricing and serving communities effectively.
Additionally, Gurga stressed the importance of diversity within the insurance sector. "We want to be more diverse as an industry, so that we actually actively represent those consumers," she explained. This move aims to better reflect the customer base and foster inclusivity.
Addressing Technology and Exclusion Concerns
When questioned about the potential for technology, such as AI, to exclude individuals by making risk premiums unaffordable, Gurga clarified that the issue extends beyond tech alone. She noted that insurers need to better explain their use of innovations like telematics, or 'black boxes' in vehicles, which are designed to make premiums more affordable by assessing driver risk profiles accurately.
"Those are not designed to be exclusionary," she assured, highlighting their role in enabling fairer pricing based on data-driven insights.
Banking Sector Perspectives on Financial Inclusion
In the same session, banking leaders shared their views on combating financial exclusion. Jasjyot Singh, chief executive of consumer relationships at Lloyds Banking Group, identified two key drivers:
- Capability and confidence among consumers.
- The interconnected nature of systems that perpetuate exclusion, beyond just product-focused discussions.
Singh outlined Lloyds' initiatives, such as helping customers maximize income through app-based benefit checks and promoting savings habits with tools like 'save the change', which has been used by around two million customers.
Branch Accessibility and Mutual Values
Stephen Noakes, director of retail at Nationwide Building Society, discussed the importance of face-to-face services for offline customers. He noted that 56% of Nationwide's customers used branches in the past year, with a demographic skew towards older individuals. "For Nationwide, it's not a minority offering," he said, emphasizing the mutual's commitment to customer choice.
Nationwide recently extended its branch promise, pledging to keep all 696 combined Nationwide and Virgin Money branches open until at least 2030, reinforcing its dedication to accessibility.
The evidence session underscored ongoing efforts across both insurance and banking to enhance trust, diversity, and financial inclusion through transparent practices and tailored services.
