Poor service levels 'leading many to switch providers'

Car insurance providers are among those firms losing money each year due to poor levels of customer service, it has been reported.

According to research conducted by Professor Merlin Stone of Oxford Brookes University, poor customer experiences led to combined losses of £3.39 billion during the last two years.

Worryingly for motor insurance providers, three-quarters of consumers were seen to be doing the sensible thing – switching service providers in at least one area in search of better service and an improved deal.

Professor Stone claimed that 20 million good customers had been lost by businesses since 2007.

He commented: "Organisations have to work harder than ever to keep their best customers.

"Consumers have become increasingly demanding and discerning, and with the rise of price comparison websites for example, it is now much easier to compare and switch products."

Last week, Paul Davies told the Financial Times that motor insurance premiums could rise by as much as 20 per cent during 2010.

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2010-01-19 13:08:41 © Moneyextra.com