Consumers are becoming confused and lack clear guidance when it comes to their savings and insurance, industry research body The Syndicate has found.
A Syndicare research initiative, ‘Where are we on the consumer's radar? ‐ navigating a route for protection insurance', focussed on the understanding of and attitude to, insurance.
It found that, in addition to constrained financial circumstances, 80% of respondents could not accurately identify the correct description of how a basic life insurance policy works. Yet, when asked about which type of insurance was the biggest priority, half said life insurance was the most important.
Commenting on the research findings Peter Le Beau, Co-Chairman Protection Review said: "We have found in our research, particularly in terms of the consumer psyche, that there are a lot of illusions affecting the way the public approach the insurance industry.
"One of the big things we want to emphasise this year is that behavioural economics is becoming a bigger part of what we, as a society, need to look at. Understanding customer behaviour and the motivations and thinking that underpins decisions."
The report, which covers a range of themes including gender, age, the economy, debt, savings, retirement and insurance also found that:
• 62% were more likely to buy a protection policy if it was rated by Which?
• Up to 75% were less likely to cancel an insurance policy if their loyalty was rewarded
• 80% said it would be useful to receive an annual statement detailing their existing cover
• 75% of respondents could not accurately identify the correct description of how a basic critical illness policy works
• The younger generation are more willing to accept insurance as a way to achieve security
However there were worrying misunderstandings in expectations from the State.
Stuart Paton Evans, general manager, business development at Hannover, said: "57% of those we spoke to thought they already had adequate provision already, so of those who had not bought a protection product only 68% recognised they had not done enough, so 32% had a perception gap.
"Where the state would help and where their savings would be adequate and the exact effects of a death or illness in the family have not got through to them.
"A large percentage of the public (48%) still fully believe that the state will, in extremis, pick up the tab and be there for them. The most aware age group was 35- 44 year olds, but still 38% believed the state would pay.
"Despite awareness, amongst non holders there is a level of casino mentality, with 61% of living for today, while 40% of those with it still rely on the state."
The Syndicate comprises Hannover Re, Zurich, PruProtect and the protection review,
