The ABI has unveiled its financial inclusion plan, together with research on insurance take-up in low income households

The ABI will increase the roll-out of “insurance with rent” schemes for social housing tenants and work with insurers to develop products for those on low incomes.

The announcements came at the launch of the ABI’s Financial Inclusion Action Plan in London on Tuesday morning. The institute has been working with the government’s financial inclusion task force to develop the programme.

Addressing delegates at the launch, economic secretary Kitty Ussher said: “It is in all of our interests to make sure we address issues of financial inclusion head on and effectively – the industry benefits if more insurance is taken out.”

The task force, which has set up a working group on insurance chaired by Royal & SunAlliance chief executive Bridget McIntyre, will focus on making contents insurance more widely available to low income households, in the first instance. Its methods will include encouraging local authorities and other social housing providers to take up and market “insurance with rent” schemes, where tenants pay a small premium with their rent for a basic product, and working with other intermediaries such as credit unions.

ABI director general Stephen Haddrill said: “With our action plan for financial inclusion, we are trying to extend the benefits of insurance to more people in poorer households – to help more people insure their property more easily and with greater confidence. We at the ABI strongly believe insurance is crucial for everyone.”

The ABI unveiled research on financial inclusion which showed that 35% of people in very low income households (less than £10,000 a year) have no insurance of any kind, compared to only five per cent of households on an average income. These same people are far more likely to be victims of theft and arson, and a third of them borrow money to replace lost or damaged possessions, further increasing their financial problems.

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