Government input crucial to addressing the UK’s ‘protection gap’

Insurance institute to collaborate on new project to deal with worrying difference

Government input crucial to addressing the UK’s ‘protection gap’

Insurance News

By Lucy Hook

The Chartered Insurance Institute (CII) has joined forces with the International Finance Corporation (IFC) to tackle the ‘protection gap’ faced by women in the UK who are disproportionately underinsured.

The two organisations have signed a memorandum of understanding which will see them collaborate on research data and raising the profile of women and risk through the CII’s Insuring Women’s Futures (IWF) initiative, and the IFC’s work in developing women’s insurance in emerging markets.

Though women have growing incomes and buying power globally, they are facing increasing financial risks which leads to a greater need for protection, a release said.

However women’s access to and engagement with insurance remains limited both in mature and emerging markets.

Keith Richards, managing director of engagement at the CII, told Insurance Business that the gulf in insurance protection is not just limited to women.

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“The broader research demonstrates that there’s a growing protection gap in the UK, which is not exclusive to the UK – there’s a protection gap that’s growing globally,” he said.

Economic and societal developments, including changing government policies, alongside “dramatic change” in the insurance industry have all helped fuel the growing gap in the UK which Richards said is now estimated to be over 2.4 trillion.

“What that really means is that more and more of the public are unconsciously self-insuring themselves against risks,” he explained.

In some cases, such as mortgage debt, it’s no longer a government priority for consumers to insure themselves, meaning that many people may end up going uninsured.

“What the campaign aims to do is help to raise that awareness, and hopes that we can work with government – who will take a degree of responsibility for protecting the public interest,” Richards said of the new initiative.

That input from the government is essential, he added, as it can often feel quite “self-fulfilling” when it is insurers alone highlighting massive insurance gaps.

“We are looking at ways in which we can work with policymakers to also recognise the need and the gap in the market, and the role that they may have to play in protecting the public against those issues.”

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