ABI director Nick Starling says insurers must remain vigilant in the current economic climate.
I’ve noticed that my local car boot sale is attracting more and more bargain hunters every Sunday morning. The reported resurgence in the popularity of car boot sales throughout the country due to the dreaded credit crunch is further evidence of tough times for families across the UK.
And in these tough times many people, not unreasonably, cut back on spending. Reports of fewer people eating out, a rise in camping holidays in the UK, and motorists driving less to save petrol show that in households throughout the country tough decisions are being made.
For insurers and their customers there is the real danger that insurance will be seen as an expendable expenditure. At the very time when families and businesses are even more at the mercy of future financial uncertainties, insurance protection is more vital than ever.
The figures show the risks many are running: one in four UK households remain without contents insurance; according to a recent survey over 30% of travellers venture abroad without any travel cover.
“For insurers and their customers there is the real danger that insurance will be seen as an expendable expenditure.
Nick Starling
Two-thirds of people say that they would be unable to meet all their debts if they lost their income. So we have a strong case for arguing that people should not be cutting back on their existing insurance and that, for many, now is the time to be buying it.
Getting this message out to the media is tricky, with thoughts of insurers ‘hard sell’ and ‘miss selling’ never far from some people’s minds. But it is a message the industry should be up front and strident in telling.
We need to be vigilant as well. The recession of the early 1990’s corresponded with a rise in fraudulent arson, as some cash-strapped firms looked to their insurance policy to keep them afloat. The warning signs of a repeat are there: AXA has reported an 80% rise in fraud in the last year, which in part it attributes to the credit crunch.
As for me, I am now of to sort through what I can to sell to bargain hunters from the back of my car this weekend. If you can’t beat them, join them.
