Pessimistic consumers ignore protection cover

Despite being pessimistic about the current and future economic climate, consumers are failing to consider insurance to protect their finances, according to the Association of British Insurers (ABI).

A survey carried out by YouGov on behalf of the ABI showed 92% of people think the economic environment is worse now than it was a year ago and 82% expect it to get worse over the next 12 months. However, 69% of those surveyed said they weren’t willing to take out any protection insurance in the future.

Nick Kirwan, the ABI’s assistant director, health and protection insurance, said: “It is worrying that so many people are not prepared to look at taking out protection insurance, even insurance which covers redundancy given the uncertain economic outlook. It’s clear that we need to work harder to get the message across about the peace of mind and value that having the right protection insurance gives individuals and families.”

Rebecca Driver, the director of research and chief economist at the ABI, added: “Confidence in the economy is deteriorating rapidly: 61% of people now think the economy is a lot worse than a year ago, compared to 49% in April. Only 5% expect the situation to improve in the next year. But people are less pessimistic about their own circumstances – while 9% feel a lot more concerned about the prospects of losing their job than they were three months ago, 13% actually feel a lot less concerned.”

However, Driver added that only 31% of people surveyed thought they could cope financially with job loss. “Given the economic outlook and the risk of rising unemployment, people need to develop strategies to protect themselves better,” she said.