Customer outcomes have further to go

Speaking at the Insurance Times Forum, Challenges for 2010 and Beyond, Stephen Haddrill, said: "The risk in recession is that customer satisfaction will not improve as the focus on costs intensifies. As you know, fraud is increasing. Detected fraud increased in volume by 17% between 2007 and 2008, with in excess of 100,000 cases detected. The industry is bearing down on those it suspects. Rightly so. The challenge is not to alienate the honest customer in doing so.

"Other risks are rising too and bringing new challenges for the relationship with customers. The greater risk of unemployment was pushing up rates for mortgage payment protection insurance earlier this year, to the dissatisfaction of the regulator.

"And the search for new customers in a stagnant market makes existing customers wonder what is going on. The word on the street is that it is always better to switch. That creates a challenging market. Why, I am asked, does the industry not put as much effort into loyalty and retention as into switching? Now I know many do but that is not how it seems out there.

"And of course the growth of price comparison through the internet has intensified the focus on price. The FSA is asking more and more questions about the websites. As always their concern is about customer expectations. The internet policy and the policy sold over the phone by the same firm are not always identical. Why should they be if one is cheaper than the other? Because the customer expects them to be the same."