Single-tie life insurance distribution models are eroding consumer trust and reducing demand for protection products, according to London-based insurer LifeSearch.
The findings, from its forthcoming Distribution Redefined study, show that 42% of consumers would trust their bank, building society or retailer less if they discovered it only offered products from a single insurer. Just 14% said their trust would remain unchanged, while the remainder were neutral or unsure.
The research highlights a clear link between trust and purchasing behaviour. Consumers were 3.5 times more likely to be discouraged from buying life insurance than encouraged when faced with a single-tie arrangement.
Around 42% said they would be less likely to buy, including 16% who said they would be much less likely, compared with just 12% who said they would be more likely to proceed.
This “walk-away” effect is particularly pronounced among customers of major financial institutions. Among customers of the UK’s largest banks, 46% said they would be less likely to buy life insurance under a single-tie model, while 42% of building society customers said the same. For many, choosing not to buy does not lead to switching providers, but instead results in delaying or abandoning protection altogether.
LifeSearch said the findings point to a broader shift in consumer expectations, with demand growing for greater choice and transparency. Nearly two-thirds (62%) of consumers said it is important to access products from multiple insurers when buying life insurance, while 69% expect fair pricing supported by comprehensive market comparison.
The company, which provides protection advice through a combination of technology and human advisers, argues that multi-insurer distribution models can improve both trust and uptake. It has formed partnerships with organisations including Yorkshire Building Society, Skipton Building Society, Which? and Lloyds Banking Group to support this approach.
Yorkshire Building Society said its partnership with LifeSearch has improved customer outcomes. Around 90% of its mortgage customers now receive a viable protection quote, compared with around 60% previously, reflecting broader access to products and specialist advice.
LifeSearch CEO Debbie Kennedy said, “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.”
Yorkshire Building Society director of savings Tina Hughes said, “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.”
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