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Saudi, UAE consumers trust supermarkets, banks more

In terms of trust in insurance companies, the UAE ranked 13th and Saudi Arabia ranked 18th out of 18 countries surveyed across Europe, the Middle East, Africa and India.

Dubai: The level of consumer trust in Saudi Arabia and the UAE for insurers is just 52 per cent, compared to 73 per cent for supermarkets, 71 per cent for banks and 67 per cent for pharmaceutical companies, according to EY’s recently-released 2014 Global Consumer Insurance Survey report.

Consumers in Saudi Arabia and the UAE have a 73 per cent trust level for supermarkets. — KT file photo

In terms of trust in insurance companies, the UAE ranked 13th and Saudi Arabia ranked 18th out of 18 countries surveyed across Europe, the Middle East, Africa and India. EY surveyed approximately 24,000 people in 30 countries, including 1,100 consumers in Saudi Arabia and the 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, said: “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.”

The lack of trust in insurance companies has had an impact on customer loyalty. Consumers showed a high propensity to switch insurers, with 32 per cent of UAE consumers and 49 per cent of Saudi consumers saying they were likely to switch insurers in the next 12 months, compared with the global average of 23 per cent. The outlook was not all negative for insurers. Consumer advocacy remains high, with 70 per cent of UAE consumers and 69 per cent of Saudi consumers saying that they would recommend their insurance provider to friends or family. This was comparable to an average of 71 per cent across Europe, the Middle East, Africa and India, and better than many developed markets, like the UK, where consumer advocacy was 57 per cent.

Sanjay Jain, director of Mena insurance advisory at EY, said: “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.”

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 per cent of UAE consumers and 47 per cent of Saudi 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 personalised communications, along with a greater range of communication channels.

Across the UAE and Saudi Arabia, 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 e-mail and mobile apps as the top two communication channels that they would like to use more.

The UAE and Saudi Arabia are also lagging the rest of the world in the use of online channels for buying insurance. In the UK, the survey highlighted that online is now the leading method for buying general insurance, with 49 per cent of UK consumers indicating that they bought their insurance policy online. This compared with just 16 per cent of UAE consumers and 10 per cent of Saudi consumers that bought their insurance policy online.

Jonathan Matchett, senior manager of Mena Insurance Advisory at EY, said: “Insurers in the 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 prioritise 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.”

— business@khaleejtimes.com