UK insurers paid out the equivalent of £77m in insurance claims every day, the most comprehensive industry statistics show. The figures, revealed in the Association of British Insurers’ ‘Key Facts 2015’, show how the industry is helping households and businesses to cope with unexpected events, through insurance products such as motor, property, travel, pet, , trade credit, income protection, and critical illness.
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Insurers pay out almost £8.2m in domestic claims daily to repair homes and replace contents, but despite an average combined buildings and contents policy costing just £24 a month, 1 in 5 UK households (24%) do not have contents insurance.
For protection insurance products only 1 in 4 (24%) of UK households have life insurance, yet protection insurers pay out more than £9m every day in financial support to families to help them cope with illness, injury or the death of a loved one.
Every day, payments made by insurers included:
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£27m to motorists to repair vehicles and cover injury claims.
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£13m in property claims, of which £8.2 million was to homeowners, and £4.7m to business owners in respect of commercial claims.
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£9m from protection policies, such as critical illness, income protection and life insurance, to help people cope with financial strains that can arise following a death or serious illness.
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£9m to business customers in commercial liability claims, such as employers’ liability.
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£9m in accident and health claims.
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£7m to help private health insurance customers receive medical treatment.
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£1.6m to pay for medical treatment for pets.
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£1m to travellers under travel insurance who needed medical help away from home.
Data also shows that last year there were 20.8m individual pension policies in force. In the first three months since the Freedom and Choice reforms in April 2015, £2.5bn was paid out from pension pots. More than £2.3bn was used to buy regular income products such as annuities or income drawdown products.
The industry is a key contributor to the UK economy. UK insurers and long term savings providers:
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Contribute £29bn to UK GDP.
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Pay nearly £12bn in taxes to the UK Government.
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Manage assets of £1.9trn, the equivalent to a quarter of the UK’s net worth, or £71,000 per household.
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The industry overall employs 334,000 people.
How do customers buy insurance?
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Customers are more likely to purchase general insurance products themselves, than long term savings products.
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Over half (52%) of motor insurance, and a fifth of property insurance (24%) is purchased by customers themselves, whether directly or via a price comparison website.
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Long term savings products tend to be taken with advice. Three quarters (75%) of customers had some form of advice to buy a pension, protection or other long term insurance product.
Huw Evans, ABI Director General comments:
“From helping people and businesses after an unexpected event, to saving for their retirement, the insurance and long term savings industry plays a crucial role to help families and businesses through the financial challenges of life. Insurance means that people and businesses are not alone and have peace of mind to go about their daily lives.
“As the largestinsurance market in Europe and third largest in the world, the UK industry makes a vital contribution to the economy, in addition to the individuals it helps on a daily basis. It is no coincidence that the most stable and prosperous economies in the world, like the UK, have a strong insurance and savings sector at their heart.
“However, there is some work to be done to build confidence in products, tackle underinsurance and help more people understand the value of protecting themselves.”
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