ABI highlight plans to reach low income households with insurance.

ABI highlight plans to reach low income households with insurance.

ABI highlight plans to reach low income households with insurance.

35 per cent of people in the lowest-income households (less than £10,000 per year) have no insurance at all. But they also need insurance most as they face higher risks from crime, fire and flooding.

These are the findings of a new report published today by the ABI (Association of British Insurers): Access for All: extending the reach of insurance.

The research for the ABI found that 44 per cent of people in the poorest households purchase home contents insurance, compared with nearly twice as many (82 per cent) in those with average incomes (£15,000-£30,000). Around a third had motor insurance and only a quarter had purchased life insurance.

When people with low incomes and no insurance have to replace stolen or damaged household goods, around a third of them borrow additional funds, increasing their indebtedness.
The ABI report also shows that poorer households face far greater risks than their more affluent neighbours. For instance:

  • households with an income below £5,000 were 71% more likely to be burgled at least once compared with households with incomes of £30,000 or more;
  • arson rates are up to 30 times higher in the most deprived communities;
  • people with the lowest incomes are also much more vulnerable to flooding.

Speaking at a seminar on financial inclusion and insurance at the ABI today, Stephen Haddrill, Director General of the ABI, said:

“Insurance provides valuable protection to people on all income levels. The poor are least able to deal with financial loss and depend most on insurance. We need to address the issue of low take-up in low-income groups. A lack of spare cash is the biggest factor holding back the purchase of insurance by lower income households.

“The ABI will be addressing this issue through our financial inclusion action plan. In early 2008 we will launch a new campaign, with a special emphasis on insurance with rent schemes, improved financial education and easier access to insurance for customers with particular needs.”

– ENDS –

Notes for Editors

1. A copy of Access for All: extending the reach of insurance is attached.

2. Full details of the ABI research are available in Financial Inclusion and insurance: meeting low-income consumers’ needs, an ABI Insurance Market Study, via the ABI website.

3. Enquiries to:
Alan Leaman 020 7216 7440 (Mobile: 07957 482 330)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler 020 7216 7415 (Mobile: 07968 364 302)

4. The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

5. An ISDN line is available for broadcasts.

Copies of all ABI news releases, together with other information from the Association, can be seen on our website http://www.abi.org.uk