Is the insurance industry entering a new age of austerity, where consumers cancel shortly after taking out cover? Maybe so and perhaps PAYG cover is less painful when it comes to all kinds of insurance. Here are some thoughts from GlobalData;
More than 11% of the travel insurance customers cancelled their policy over the past 12 months as a cost-saving measure amid the UK’s cost-of-living crisis. Meanwhile, a further 9.0% of the pet insurance customers and 4.8% of the home insurance customers took the same action, according to the GlobalData’s 2022 UK Insurance Consumer Survey.
Benjamin Hatton, Insurance Analyst at GlobalData, comments: “The squeeze on living standards in the UK is forcing many consumers to alter their spending habits as the cost-of-living crisis continues to bite. Over 41% of consumers who canceled their travel policy did so as a cost-saving measure. The COVID-19 pandemic also continues to affect consumers’ travel plans with 29.0% canceling as they say they are traveling less frequently than before.”
According to the survey, 50% of consumers who canceled their pet insurance policy did so to reduce their costs. A further 10.2% of policyholders are considering canceling their pet insurance policy as inflation drives more and more consumers to take significant cost-saving actions.
Hatton concludes: “For home insurance cancellations, the most frequently cited reason was again to cut costs, with 44.4% of respondents giving this reason. As home working has remained a significant trend since the onset of the pandemic, some consumers are canceling home insurance policies in response to spending more time at home. 17.9% of respondents who canceled gave this factor as a reason for the decision.”
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