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The Actuary The magazine of the Institute & Faculty of Actuaries
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Protection and health an increasing priority since downturn

The number of people wanting to protect their family’s income and health has more than doubled in the last 12 months, according to figures released by Hannover Life Re (UK) and the Protection Review.

Nearly half (49%) said this was more of a priority since the financial downturn, a 27% jump from the 2010 figures (22%). Women in particular are more likely than men to see this as a priority - 55%, compared with 43% for men.

Those who felt there was no difference since the downturn had dropped to 45% from 74% last year.

Hannover Life Re believes the increase in the number of people taking more responsibility for their own and their family’s income and health could be an indication that many feel the recession starts here.

When asked who or what people would rely on if they were off work for a long period of time through illness or accident, responses were:

54% savings
46% partner/spouse
35% family/parents
36% State benefits
31% employer cover
19% protection products

Many still believe that their savings will see them through, the firm said, with 31% believing their savings would allow them to manage to pay their bills without a regular income for more than 12 months.

"These findings reflect the fact that many consumers still have unrealistic perceptions of surviving financially for more than 12 months," said Stuart Paton Evans, general manager, business development, Hannover Life Re (UK).

"This parallels with their views on how they would survive in the event of suffering a long-term illness or accident, with 60% of 35-44 year olds relying on savings.

Mr Paton Evans added that the reliance on State benefits had decreased which points to people picking up on austerity messages from the Government, but he noted that, for the life insurance industry, this has yet to have a positive impact on sales of protection insurance.

"The message that selling a home or car, relying on partners, employers or the State are insufficient long-term solutions to protection needs appears to be filtering through to consumers," he said.

"People are aware of the need for adequate protection and many are now saving more to build a nest egg, but are still failing to translate this awareness into action".