The general insurance industry has been warned it may suffer from reputational damage caused to the broader financial services sector.

The Hayne royal commission continues to uncover examples of poor practice, and while general insurance has escaped relatively lightly so far, it may still be undermined as consumer trust is eroded.

The latest annual “Radar” report into general insurance by actuaries Taylor Fry highlights trust as an increasingly important issue for Australia’s general insurance industry.

“At this early stage, I would say general insurance is better placed than the life or banking sectors,” Senior Actuary Scott Duncan told insuranceNEWS.com.au.

“In terms of the volume of submissions, the royal commission has been dominated by banking, superannuation and financial advice.

“On that basis, you could expect that general insurance doesn’t have the same issues, but only time will tell and nobody is immune from the impact of what goes on within financial services as a whole.”

Mr Duncan says the general insurance sector has a “pretty good appreciation” of the importance of trust.

“However, there are pockets where trust has come under threat, and add-on insurance is a great recent example of that.

“There have been other examples in the past, such as after the Brisbane floods in 2011.

“Mistrust is present wherever the customers’ expectations are not met.”

He says the fact general insurance is typically centred around an annual product, giving policyholders the ability to easily change provider each year, means consumers are less likely to be taken for granted.

“There is a great focus now on building longer-term relationships with customers, from companies such as IAG and Suncorp.”

See ANALYSIS.