"Trust matters. Consumers expect choice, and when it’s missing, trust is lost."
- Debbie Kennedy - LifeSearch
New consumer insights from LifeSearch have revealed that single-tie distribution arrangements carry a significant trust issue with customers, as well as a tangible impact on their intent to buy protection insurance.
The new research forms the basis of a forthcoming study, Distribution Redefined, and found that more than four in 10 (42%) of consumers would be less trusting of their bank, building society or retailer if they discovered it only offered life insurance products from one insurer. Only 14% of consumers said they wouldn’t trust them less, and a further 44% either did not know or had a neutral view.
Trust erosion is slightly more pronounced among building society members, with almost half (45%) stating they would trust their provider less under single-tie arrangements.
When asked how discovering a single-tie arrangement would affect their likelihood to buy life insurance from that provider, consumers were 3.5 times more likely to be alienated rather than encouraged to buy. Four in 10 (42%) said they would be less likely to buy, including 16% who said they would be much less likely. Just 12% said they would be more likely to buy.
For many customers, this often means delaying or abandoning protection altogether rather than exploring options elsewhere.
The likelihood of walking away is significant among customers of some of the UK's largest financial institutions. More than two in five (46%) of the Big Four banks’ customers said they would be less likely to buy life insurance if their provider was tied to a single insurer. The same was true of 42% of building society customers.
LifeSearch recently reported that almost two-thirds (62%) of consumers consider it important to access products from multiple insurers - not just one - when seeking life insurance through banks, building societies or high-street retailers. Additionally, 7 in 10 (69%) would want fair prices underpinned by a comprehensive market comparison when taking out life insurance in this way.
This news comes after LifeSearch recently secured strategic partnerships with Skipton Building Society and Yorkshire Building Society, as well as other firms, including Which? and Lloyds Banking Group.
READ MORE: Skipton teams up with LifeSearch to provide tailored protection advice
"Trust matters. Consumers expect choice, and when it’s missing, trust is lost. Where providers move away from single‑tie models and give access to the wider market, trust increases, and so does protection take‑up. Our partnership with Yorkshire Building Society shows the commercial impact trust can have," Debbie Kennedy, CEO of LifeSearch, said.
Tina Hughes, director of savings at Yorkshire Building Society, added: "Trust and choice sit at the heart of our relationship with members. The research clearly shows that consumers expect access to the wider market when they’re making important decisions about protection.
"Partnering with LifeSearch has enabled us to give members access to broader choice and specialist protection expertise, while remaining focused on their best outcomes. Importantly, we do not take any commission from LifeSearch; instead, we pass that saving directly back to members who take out protection policies, ensuring they receive genuine value as well as expert support.
"The impact has been striking. In the first year of the partnership, we are protecting more members than before, and around 90% of Yorkshire Building Society customers now receive a viable protection quote when arranging their mortgage, up from around 60% previously. That improvement directly supports our commitment to helping members protect what matters most."
