New Dawn Risk’s chief executive gives his predictions for insurance consumer confidence as the UK is plunged into lockdown yet again
Specialist insurance intermediary New Dawn Risk is predicting that commercial SME buyers will be more inclined to allow non-mandated insurance (optional/not legally reqiured) to lapse as they struggle with increased financial pressures arising from the Covid-19 pandemic.
And this could justify their decisions based on insurers avoiding claims payouts, according to Max Carter, chief executive of New Dawn Risk.
“This year, the combination of a perception that insurers are looking to ‘wriggle out’ of paying Covid-related business interruption claims and general insurance premiums rising as a result of hard-market reinsurance rating pressure will further dent consumer confidence in the value of insurance,” Carter said.
He predicts that newer products such as cyber insurance will “almost certainly fall off as well”.
Carter added: “It will take an industry-wide coordinated campaign to rebuild consumer trust in the industry.”
It follows the UK being forced into full lockdown yet again this week at the start of 2021 as Covid-19 cases soared under the new variant of the virus, and as a consequence UK consumer trust in the insurance industry could also be at an all time low.
Compounding the issue
A survey in 2017 by comparison site Claims Rated found that only 37% of younger consumers aged between 16 and 29 believed that an insurance company would pay out in the event of a claim.
In addition to this is the Payment Protection Insurance scandal, as well as rising general insurance premiums over the past two years which Carter said has “compounded the issue”.