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Daily Insurance Industry News
Thursday 22nd of February 2018
July 14, 2009

Premium income to fall £1bn in 2009

by David Masters

Story link: Premium income to fall £1bn in 2009

Premium income will be dented by up to £1 billion this year as budget-conscious consumers failed to renew insurance policies or look for cheaper deals, Deloitte said this week.

A survey by the analyst group found that 17% of UK consumers are thinking about cutting back on insurance spending when their policy comes up for renewal.

Household and contents insurance will be worst affected by the cuts, Deloitte said.

Three quarters of consumers, however, do not intend to reduce their insurance spending, and the number of consumers intending to make cuts is down from 26% last year.

Of that 26%, only half went on to cut their insurance spending.

“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,” said James Rakow, insurance analyst at Deloitte.

“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 £1 billion.”

Payment protection insurance (15%), pet insurance(15%), health insurance (13%), household insurance (5%), and motor insurance (2%) were the areas most affected by budget cutbacks in the past 12 months.

The results also showed that fewer people think it is acceptable to inflate an insurance claim compared to 12 months ago.

Mark McIlquham, insurance partner at Deloitte, said: “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.

“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.”

 

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