Customers in Saudi Arabia and UAE trust insurers less than banks

• In KSA and UAE, the level of consumer trust in insurers is just 52%, compared to 73% for supermarkets, 71% for banks, and 67% for pharmaceutical companies
• The UAE and KSA ranked 13th and 18th respectively, out of 18countries surveyed across Europe, Middle East, Africa and India, in terms of trust in insurance companies
• 32% of UAE consumers and 49% of KSA consumers saying they were likely to switch insurers in the next 12 months, compared with the global average of 23%

Dubai, 17 December 2014: In the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE), the level of consumer trust in insurers is just 52%, compared to 73% for supermarkets, 71% for banks, and 67% for pharmaceutical companies according to EY’s recently released 2014 Global Consumer Insurance Survey report. In terms of trust in insurance companies, the UAE ranked 13th and KSA ranked 18th out of 18 countries surveyed across Europe, Middle East, Africa and India.

EY surveyed approximately 24,000 people in 30 countries, including 1,100 consumers in KSA and UAE, to find out what matters most in the relationship customers have with their insurers, how they interact and how satisfied they are with the range of policy offerings.

Gordon Bennie, MENA Financial Services Leader at EY, comments:
“MENA insurers need to fundamentally rethink how they interact with consumers. Despite the effects of the financial crisis, trust in banks has recovered, while trust in insurance companies remains low. While banks have made efforts to re-engage with consumers to rebuild trust, insurers are relying on only a few points of contact to build a trusted, long-term relationship with their customers.”

Customer loyalty impacted by lack of trust, but consumer advocacy remains high
The lack of trust in insurance companies has had an impact on customer loyalty. Consumers showed a high propensity to switch insurers, with 32% of UAE consumers and 49% of KSA consumers saying they were likely to switch insurers in the next 12 months, compared with the global average of 23%.

The outlook was not all negative for insurers. Consumer advocacy remains high, with 70% of UAE consumers and 69% of KSA consumers saying that they would recommend their insurance provider to friends or family. This was comparable to an average of 71% across Europe, Middle East, Africa and India, and better than many developed markets, like the UK, where consumer advocacy was 57%.
Sanjay Jain, Director, MENA Insurance Advisory at EY explains:
“While consumers will advocate for their insurer, a combination of a lack of trust with the industry and little or no communication coming from the insurance company, means that consumers are easily encouraged to switch insurer when their policy is due for renewal. This tells us that every interaction between insurers and their consumers is a critical moment of truth, and that just one positive or negative customer experience can make a real difference.”

Interactions between insurers and consumers lacking in frequency and quality
The survey found that interactions between insurers and consumers currently occur so rarely that any one point of contact can significantly shift the perception of insurers and brokers in the consumer’s mind. Over the last 18 months, 41% of UAE consumers and 47% of KSA consumers have had a customer experience that fundamentally changed the way that they think about their insurer. Consumers indicated they want more frequent, meaningful and personalized communications, along with a greater range of communication channels.

Across the UAE and KSA, survey respondents highlighted a desire to move away from traditional methods of interaction, such as going to the branch or face-to-face meetings with their insurance agent, and listed email and mobile apps as the top two communication channels that they would like to use more.
The UAE and KSA are also lagging the rest of the world in the use of online channels for buying insurance. In the UK, the survey highlightedthat online is now the leading method for buying general insurance, with 49% of UK consumers indicating that they bought their insurance policy online. This compared with just 16% of UAE consumers and 10% of Saudi consumers that bought their insurance policy online.

Jonathan Matchett, Senior Manager, MENA Insurance Advisory at EY concludes:
“Insurers in MENA have traditionally devoted a lot of attention to new sales to new customers. However, all of that effort can go to waste if the insurers do not also prioritize servicing and retaining their existing consumers. Insurers need to focus on improving the customer experience across all customer interactions to ensure that satisfied customers do not become disillusioned. Insurers also need to respond to consumers’ demands for greater and better quality communication from the insurance company, with a greater choice of communication channels.”