Consumers adopt “casino mentality” to insurance

A 67-page report, Where Are We on the Consumer’s Radar? Navigating a Route for Prrotection Insurance, said a survey of more than 3000 adults found 58 per cent have abandoned saving.

The report, compiled by the Syndicate, a partnership between Protection Review and Hannover Re, also found consumers are adopting a “casino mentality” to their insurance.

The survey found 61 per cent of non-insurance holders were “living for today”, while 42 per cent of those who held insurance agreed with this approach.

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When asked about what type of insurance was the biggest priority, half said life insurance was the most important, yet 80 per cent of respondents could not identify accurately the correct description of how a basic life insurance policy works.

Peter Le Beau, co-chairman of Protection Review, said: “It is not news that the economic crisis is impacting significantly on the way consumers feel about their finances. Sadly, they are not prioritising protection despite its relevance in many situations. We need to change this thinking quickly.”

Ronnie Bowes, head of marketing for the Hannover Re UK Life Branch, said: “The challenge for our industry is how we can offer solutions to people who don’t see a problem and are willing to take a risk - the ‘Casino-Mentality’.

“Behavioural economics explain some of the reasoning behind why consumers discount something that is in the future, the ‘enjoy it now, worry about it later’ approach. We need to look at new ways to communicate the greater reward protection products offer to encourage them to look longer term to receive the valuable benefits they provide ‘not today, but tomorrow’.”