The majority of motor insurance consumers (55%) do not read the terms and conditions of the policy, a consumer study conducted by the Malta Financial Services Authority has found.
The study, one of the deliverables tied to the authority’s conduct supervision priorities, found that 22% of those who read the terms and conditions find them difficult to understand.
Other key findings of the study include that 61% purchase their motor insurance policy directly from an insurance company, with price being the main decision driver in choosing a motor insurance cover (32%).
Most consumers were reluctant to change their current provider and 90% claimed to be satisfied or very satisfied with their insurance policy and service.
The majority of respondents (66%) demonstrated a lack of knowledge about what to do in case of an unsatisfactory complaint handling by their insurance provider.
The survey also found that women preferred buying directly from insurance company undertakings, while men preferred to purchase from retail intermediaries.
This research was intended to assist the MFSA enhance its insight into consumers' understanding of the identity of their motor insurer, establish the drivers of consumers’ purchase decisions and assess consumer satisfaction on the level of service received.
The fieldwork, which was carried out last November, consisted of telephone interviews with 400 motor insurance policy holders.
MFSA’s head of conduct supervision Michelle Mizzi Buontempo said the authority was committed to carry out regular reviews of products as part of its supervisory activity to be able to gauge the effectiveness of measures it took to enhance consumer protection and identify areas for improvement.
It will now be further examining and considering the results of this survey to address the deficiencies indicated by the findings.
In particular, a number of consumer education initiatives regarding insurance products will be embarked upon, alongside further reviews of the current regulatory framework to assess whether any changes were necessary to address shortcomings.
Do you have questions about this research? Contact the MFSA directly at info@mfsa.mt for information or clarifications.