October 23, 2017

Having recently been charged with its regulation, the Financial Conduit Authority (FCA) has been trying to find out a bit about insurance and what people think about it and so on.

The findings of the regulator’s Financial Lives Survey 2017 make for absolutely fascinating reading. For instance, did you know that 18% of the adult population ‘hold’ no general general insurance policies whatsoever? IKR, what is wrong with these people.

Also: fewer than 60% of 18-24 year olds (and a pitiful 55% among young males) ‘hold’ any flavour of general insurance product, suggesting that the proportion with (compulsory) motor insurance is even lower. Perhaps as low as 50%?

This presumably means either that they don’t own motor vehicles or (more probably) that they’re a) being fronted by their parents or b) not bothering with (pricey) motor insurance.

But perhaps the most startling finding to emerge from the FCA’s research is that most people living in the UK are deeply ignorant, incurious, or both. Almost one in three adult Brits, for example, have literally no idea what ‘no claims protection’ means.

It is ignorance and incomprehension like this that has led the FCA to classify around half the population as ‘vulnerable’ meaning that they can’t be trusted to use insurance wisely or safely and probably won’t have the cover they need when things go wrong.

Not the least significant way in which Brits are clueless when it comes to insurance is that many don’t know the difference between a broker and an insurer or indeed why they can’t be trusted to help themselves without the help of the former category of insurance provider.

In a classic instance of wanting to know the price of everything but the value of nothing, one in four UK insurance customers told the FCA that they would always opt for the cheapest product. Another one in four said they’d be open to considering quality as well as quantity, but had no idea how to do so.

Reflecting on how ‘vulnerable’ Brits can be protected from their own ignorance, FCA chief exec Andy ‘Bails’ Bailey, said he was planning to use all this fascinating information “to increase our knowledge and understanding of the issues affecting consumers and how to best protect them.”

That’s a lovely thought, but surely we get all the help we need from that Opera bloke and the meerkats and such like.


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