ProtectionMay 24 2014

Lies, damn lies and protection insurance statistics

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      CPD
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      Facts and numbers can be used in a serious way to help persuade a client regarding the value of insurance, or they might be used in a more jovial manner as a way to introduce the subject. Either way, the protection industry is full of statistical data.

      For example, did you know that according to the national Census the average UK household spends £11.80 per week on alcohol, tobacco and narcotics?

      Or that the research from LV shows that the average cost of raising a child to age 21 is £227,266 – or £10,822 a year – and that of the overall amount almost £5,000 goes on pocket money?

      Or that the average first-time buyer deposit in February this year according to the CML was over £26,000 and that the average age of those first-time buyers was 30?

      And did you know that life expectancy in London can vary by more than 20 years depending on which part of London you were born in?

      If there is one thing the protection industry is not short of it is statistics, although we need to be careful in their use. As one person pointed out to me when researching this piece the average human being has one breast and one testicle, which is true, although not necessarily accurate.

      The other issue with statistics is that they can desensitise us and remove some of the emotion, which shouldn’t be forgotten.

      Last week I met an IP claimant through Aviva who told a room full of insurance people that the product had not only changed her life but the lives of her family as well. It is easy for those of us who talk about protection insurance every day to become desensitised.

      The claimant also talked about the need to remove jargon. “Don’t call it IP, stick to income protection” she said.

      It is one thing to know about important statistics but another to understand what they really mean to everyday families. So let’s take a look at some of the most interesting protection stats.

      Industry

      3 - The UK insurance industry is the third largest in the world and the largest in Europe.

      £164.7bn - According to the Association of British Insurers in 2012 a total of £164.7bn was paid in premiums for long term insurance products and £196.2bn was paid in claims and benefits.

      £10.4bn - In the 2010/11 tax year ABI members contributed £10.4bn in taxes, equivalent to 1.9 per cent of total Government tax receipts.

      320,000 - The insurance industry employs around 320,000 people in the UK.

      29m - In 2012 there were an estimated 29m protection, term and whole life policies in force.

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