Swiss Re has welcomed a paper from the Financial Services Consumer Panel which states the life assurances protection gap and disability income protection gap have both grown since the reinsurance giant first calculated them 15 years ago.
The panel has called on the insurance industry, regulators and other stakeholders to tackle the gap, which threatens consumers with the financial consequences of long-term illness or premature death.
“We agree strongly with the Panel recommendation that Government examines the case for allowing a full disregard for all capital and income payouts in the assessment for Universal Credit and other means-tested benefits,” said Ron Wheatcroft, Technical Manager at Swiss Re.
“It is encouraging that the report finds that the consumer research and industry views are very similar. This provides a solid base to build on.”
The Panel says its consumer research, and discussions with industry representatives, highlight the lack of innovation in the market over the past three decades.
Panel Chair, Sue Lewis said: “Protection products have not kept pace with the needs of today’s workforce. People now are more likely to be self-employed or have insecure employment, with volatile incomes.”
“Our research shows that people want value for money products that suit their lifestyles, and that they understand. The industry needs to respond to this, rather than just selling the same products as it did 30 years ago.”
Additionally, the paper determined that policy focus up to this point has been focused on encouraging savings as a means of building financial resilience with little discussion about the role of insurance in helping people manage life’s risks.
“We hope the industry, regulators, and other stakeholders will join in the debate about how this market can be improved for consumers. More of the same is not an option,” added Lewis.