Rising cost of insurance drives customers to cut back on cover

More than a quarter of people have cut back on their insurance cover over the past 12 months because they could not afford it, according to research by Close Brothers Premium Finance.

A recent study from the premium finance house showed that 16% were thinking of cutting back over the next year, while a further 19% were unsure whether or not they would have to do this.

But Close Brothers said the research also revealed there were still opportunities for the insurance industry to offer premium finance to those who knew little about the facility.

According to the survey, only 57% of consumers had heard of it, while over a third (37%) of those who had never used it, would consider it in the future.  A further 22% were unsure.

Brokers and other intermediaries typically use premium finance houses to arrange for businesses and individuals to spread their insurance premium payments over several months.

Close Brothers Premium Finance managing director Janet Wilson said: “Our research shows the huge potential for the premium finance market. 

“It’s clear that more needs to be done to educate people about its benefits because when it is explained to them many are interested in using it, and this could have a positive effect on the take up of insurance products.

“The costs of insurance are rising in many areas of the market and remain a key consideration for many people.”

The online study in which 1,016 people took part, was conducted by research company Consumer Intelligence, between 30 June and 3 July 2014.