Deloitte research - £1bn in lost premium, less than thought
Consultants Deloitte claims YouGov research shows consumer insurance cuts could cost insurers £1bn in lost premiums but are not as severe as predicted.
The research shows:
- £1bn in lost premium due to insurance cuts
- Only 13% of consumers have cut insurance spending but 26% said they would
- 17% are looking to cut back their policies when next up for renewal
- 75% said they would not consider cutting back on any policies
- 62% view the practice of inflating claims as illegal and fraudulent
- 72% are not likely to consider inflating a claim
- Only 1% think it is acceptable to inflate claims in the current climate
The areas most affected by cut backs over the past 12 months were:
- Payment protection insurance (15%)
- Pet insurance (15%)
- Health insurance (13%)
- Household (5%)
- Motor (2%)
Recession not so bad
James Rakow, insurance associate partner at Deloitte said: “These results show that while consumers are still feeling the pressure of the recession, it is evident that the financial crisis has had a smaller impact on consumer spending on insurance than was anticipated 12 months ago.
“Once the recession is over insurers might be wise to think about their tactics to regain the business lost, which could amount to as much as £1bn across the market for products such as motor, home, pet, travel and private medical insurance.”
Fraud a problem
Mark McIlquham, insurance partner at Deloitte said: “Insurance fraud typically thrives in a downturn, and it has been estimated that fraud adds an extra £40 a year to the average insurance premium. Despite recent reports that fraudulent claims are on the rise, it is encouraging to see that there has been a reduction in the number of consumers who think it is acceptable to inflate their claims. This may indicate that education of consumers is working given that an increased percentage of consumers consider it illegal which is a positive for the industry. Nevertheless, with 8% of consumers still saying that it is likely that they would consider inflating their claims, this remains a major concern for insurers.”
