A leading insurer has said that its new research has found the industry is still losing the battle to build the trust of policyholders.

Allianz UK has today launched Trust Issues, its inaugural trust in insurance benchmark. The report is designed to track how UK consumers and SMEs experience trust in insurance, and to identify where confidence is strong, where it is fragile, and what is needed to close the gap.

On the benchmark’s 100-point scale – where 0–50 is “poor”, 51–70 “average” and 71–100 “good” – consumers score 56.2 and SMEs 60.5. Both sit inside the average band: a relationship that is stable on the surface but fragile beneath it, held back not by a lack of understanding, but by a lack of reassurance.

The research found that insurance is almost universally recognised as essential: around nine in ten of both consumers and SMEs agree it protects against unexpected events, and 86% in both groups say they feel reassured simply knowing they have cover, even if they never use it.

Despite this, the industry does not convert that relevance into trust. Insurance ranks mid-table — ninth of 13 sectors among consumers and eighth of 11 among SMEs – trailing the NHS, banking and accountancy. Around three-quarters of both audiences associate the industry with loopholes, profit-first behaviour and reluctant necessity -believing insurers look for loopholes to avoid paying claims and prioritise profit over customers.

The benchmarking system’s most consistent finding is the scale of the gap between what people fear about insurance and what they actually experience when they claim. Among consumers who have made a claim, more than eight in ten describe it as handled fairly, clear and easy to understand, and 90% say it was paid in full or in part. The figures for SMEs are even stronger, rising to 95% paid in full or in part.

Trust in people’s own insurance provider runs at least 20 points higher than trust in the industry overall – for both consumers and SMEs -suggesting that scepticism is largely directed at the sector as a whole, rather than at the providers people and businesses actually deal with.

Colm Holmes, chief executive officer of Allianz UK, said: “Insurance may be technical, but trust is emotional, built on fairness and empathy.

“People buy insurance for peace of mind, so it should concern all of us that so many still doubt it will be there when they need it. That is not a comfortable finding for our industry, but it is an important one.

“Insurance is an essential product for millions of people and businesses. Customers should be able to feel clear about what they are covered for, more confident in how they would be treated in the event of a claim, and more certain that their insurer will do what it says it will do.”

The benchmark scores both audiences across four pillars: understanding of underinsurance, perceived adequacy of cover, perceived consequences of underinsurance, and emotional comfort. Both consumers and SMEs land in the “average” band of the benchmark’s scoring system.

In both groups, understanding of underinsurance and its consequences scored relatively strongly, but emotional comfort was the weakest pillar by a clear margin, indicating that knowledge of risk is not translating into reassurance.

When asked what builds trust, both consumers and SMEs ranked fairness, transparency and customer advocacy far above innovation or technological capability. “Caring for customers’ best interests” and “providing transparent and accurate information” topped the list for both audiences, while innovation and capability drivers ranked lowest.

Holmes added: “This trust gap matters. When people lack confidence or understanding in insurance, they hesitate. They underinsure. They avoid difficult conversations about risk. And in some cases, they disengage from insurance altogether. The result is not just poorer outcomes for customers, but greater vulnerability for households, businesses and the wider economy.

“Closing this trust gap will not happen overnight, but we are determined to demonstrate the value of insurance. This benchmark is only the beginning: we will keep listening, keep measuring what matters, and keep holding ourselves to account – because rebuilding trust is not just good for Allianz, it is vital for every household and business that depends on insurance to be there when it counts.

“This further demonstrates why we are so committed to our brokers. They are the ones who can recommend our services to their clients, so building and maintaining trust with them is a priority.”