Global consumers trust the insurance industry less than supermarkets, banks and car manufacturers, according to a new survey from Ernst & Young.

Analyzing various product types, distribution channels, geographic regions and market maturity levels, EY's 2014 Americas Consumer Insurance Survey: Reimagining customer relationships also found that 29% of consumers purchasing from independent brokers are more likely overall to switch insurers or cancel policies—50% of which are more likely to do so regarding life products.

To combat that high customer turnover, independent agents “need to up the level of engagement and communicate more consistently and more clearly and simplify their messages,” says Kaenan Hertz, U.S. insurance customer leader at EY. High satisfaction levels for independent agents and brokers stemmed from responsiveness and understanding the client and their preferences—signs that agents are capable of creating a sense of relationship and engagement where carriers cannot.

“It’s still very clear that when products are more complex, having that human interaction is still critical to provide guidance,” Hertz says. “Agents do a great job in moments of truth and are very strong in education, research and maintenance functions.”

But it’s also important to take a look at an agent’s relationship with a carrier. “Realize that the agency and the carrier have a symbiotic relationship,” Hertz says. “If things improve for the carrier, that trickles down to the agent. But for the carrier to grow the overall pie, they need to realize that the customers have become channel-agnostic.”

The survey’s key findings included:

1. High turnover and low trust signal serious relationship issues. Although “value for money” (43% for independent brokers) and “brand reputation” (34%) were the most important characteristics regarding a consumer’s relationship with his or her insurer, “easy to understand, clear communication” (40%) and “being easy to deal with” (44%) were also important factors in solidifying trust.
2. Just because they leave you doesn’t mean they don’t love you. For the 20% of North American customers who closed a policy in the past 18 months, more than half said they are likely or very likely to recommend their former insurer.
3. Insurers have so few interactions with their customers that each one becomes a critical moment of truth. 44% of global customers reported having no interaction with their insurer in the last 18 months, but when they did interact—whether it was a mundane task like changing an address or during a crucial life-changing situation—satisfaction levels were high: 70% of respondents experienced a positive outcome during a “moment of truth” and nearly half (46%) indicated they obtained additional coverage at the time.
4. Consumers want more frequent, meaningful and personalized communications. 45% are satisfied and 20% are very satisfied with their independent broker’s amount of outbound communication. But a surprising 57% of global insurance consumers want to hear from their providers at least semi-annually, while only 16% want no communication at all.
5. As consumers embrace digital, insurers must rethink their distribution strategies and partner relationships. Because consumers are now driven to do their own research and purchasing, agents and insurers must respond to the desire for more information outlets. The study suggests three or four remote/digital options may be the optimal mix of contact methods for consumers—the start of a shifting landscape for the industry as a whole.

“There are areas of strength and areas of opportunity,” Hertz says of the results. “Carriers and agents need to figure out how to better engage with their clients and have to switch the conversation to one of value and relationship.”

Regardless of high turnover or low satisfaction levels, the customer-centric business model is here to stay. “The companies that are innovative are putting the customer at the center of the relationship and aren’t placing products and markets into silos,” Hertz says. “In the end, the trick is to realize that we are now in the age of a consumer-driven choices.”

Morgan Smith is IA assistant editor.