Consumers have lost faith in insurance - Swiss Re

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Consumers are not thinking long-term and have been turned off by insurance companies due to negative customer experiences, a new report warns.

Swiss Re's 2013 Insurance Report found people are increasingly thinking more short-term about their financial situation.

As a result, people start saving for retirement too late and do not place a high priority on financial products which would provide benefits later in life.

Although two-thirds of those questioned see the value of insurance, many of them find financial services and insurance uninteresting. This also appears to have a "knock-on influence" on their children and future generations.
However, the report found 92% of consumers think that employers have a role to play in wider benefit provision.

Yet over three-quarters of all UK employers, however, provide no life, income protection or critical illness cover at all. Those that do tend to be older, more-established companies with a large number of employees.

"It's telling that most consumers see benefit provision so positively. The insurance industry already does much good work providing protection cover through employers. Now is the time to build on this," said Ron Wheatcroft, technical manager at Swiss Re and co-author of the report.

The report also said "the convergence of technological, social and regulatory factors has led to a once in a generation opportunity for advisers, product providers, intermediaries and other stakeholders to provide an integrated landscape of state and private provision."

Russell Higginbotham, CEO Swiss Re UK & Ireland said: "This year's Insurance Report paints a startling picture of UK consumer thinking. While there are consumers who are switched on and savvy about financial planning, for a lot of people financial survival is about getting through to the next pay day.

"It's so important to listen to our customers and be aware of the bigger picture if we are going to provide insurance protection for as many people as possible."

Higginbotham added: "The world has changed and will continue to change and the insurance industry needs to keep ahead of the curve. We have to update our business models and innovate without losing sight of the fact that the fundamental need for saving and protection has not changed. Indeed, in a defined contributions pensions world, they become even more important."

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