Why Do Americans Distrust Insurance Providers?

The number of Americans with no insurance is staggering. According to the 2018 census report, nearly 10% or over 27 million didn’t own one.

The percentage has also been increasing over the years. Back in 2017, the uninsured rate was less than 8% or 25.6 million. Meanwhile, data shared by PBS revealed that at least 38 million is insured, but the coverage is inadequate.

What causes this trend despite the Affordable Care Act (ACA)? The Kaiser Family Foundation report blamed it on the high cost of premiums. Based on their statistics, over 40% of uninsured adults lacked coverage because they couldn’t afford it.

However, this issue can also have an underrated reason: lack of trust for insurance providers.

The Insurance Distrust

calculator and balance sheetHow distrusting is the USA with health insurance providers? In a 2017 YouGov survey, over 45% said they trust these businesses. But almost the same percentage shared opposite opinion.

The rate of distrust as higher among the younger population. For providers, this is a problem for two reasons:

  • Older adults are more likely expensive and difficult to insure.
  • The younger generations, especially millennials, account for a significant percentage of consumers. By 2020, their purchasing power could reach $1.4 trillion.

A different survey also showed a similar result. In the Harris poll, at least 1,000 Americans 18 years old and above responded to the questions. About 24% believed that health insurance companies had low reputations. Only 15% rated these businesses to have high credibility.

In another Harris survey, only 26% thought that insurance providers offer high-quality products. About the same percentage said that these companies contribute something positive to the country.

Where is the distrust coming from?

1. Confusing Language

The YouGov survey revealed that one of the reasons for the distrust is the confusing language. They struggle to understand not only the terms and conditions of the policies but the products themselves.

When people cannot comprehend these products, they fail to see the value or benefits of insurance coverage. They can become suspicious of the provider and avoid buying, thinking they will make an inaccurate decision.

2. Belief in Lack of Protection

Meanwhile, the Harris polls pointed to other causes, such as fear of an invasion of privacy. They believed that insurance providers, who collect personal information, might not have the means to safeguard their data. These companies are also prone to data breaches and cyberattacks.

3. Poor Consumer Interest

The distrust can also stem from the idea that insurance companies don’t have consumer interest at heart. In other words, they are only after profits, and everything is all business.

The Power of Analytics

Addressing these challenges can help insurance providers boost their credibility and, subsequently, increase their number of clients and revenues. While there are many strategies to do this, one effective option is risk analytics platforms.

How can these tools help?

  • Risk analysis assists insurance providers to determine brewing problems that can threaten the industry. In turn, the ability to mitigate these threats could promote a perception of stability.
  • The analysis also allows insurance providers to develop insurance packages that meet the needs of their clients.
  • High-quality platforms offer excellent security features that help reduce the risk of data breaches and cyberattacks.
  • Analysis promotes transparency, which helps both the clients and the companies to decide better.

Sufficient insurance coverage takes a significant burden on the country’s healthcare system and supports the national economy. That’s why insurance providers strive to cover as many people as possible. But to do that, they need to get past challenges, including poor reputation.

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