US LIFE INSURERS MISSING OUT ON $70BN IN PREMIUMS
1. The average life insurance policyholder in the US is massively underinsured, new research has found, with firms potentially missing out on almost $70bn (£53bn) in annual premiums.
2. InsurTech company revealed that only 26% of the total coverage needed for comprehensive life insurance is currently met in the US.
3. By failing to harness the “troves of data at their disposal”, the report estimates that insurers miss out on an average of $785 per person in untapped premiums every year. Policyholders are generally unaware that they are underinsured, and the onus must be on the insurance industry to remedy that,
4. The research shows that West Virginia is the state with the greatest percentage of underinsurance at 85%, while Oklahoma, which has the most coverage, is still on just 51%.
5. But larger and more highly populated states are not less likely to be affected by underinsurance, and often present the biggest opportunities for insurers. In terms of monetary value, the research shows that California is the state with the greatest unmet need, with insurers missing out on $7.3bn in premiums each year.
6. Texas, Florida, New York and Ohio complete the top five states with the largest unmet market opportunity, while Maine, Idaho, Hawaii, Montana and Oklahoma make up the bottom five.
7. Insurers have failed to effectively communicate the importance of life insurance to customers, targeting the wrong people at the wrong time, and giving inappropriate coverage recommendations.
8. Poor customer management, the prime reason for lapsation and inappropriate coverage, could be drastically improved by utilising and effectively monetising customer data.
OVERPAID PREMIUM - UK DRIVERS CAUGHT IN £1.2bn INSURANCE 'LOYALTY TRAP'
1. Millions of British drivers are automatically renewing their car insurance every year and are overpaying by £1.2bn as a result, research by GoCompare has revealed.
2. The study found that 4.6 million drivers rolled over their car insurance without looking for a cheaper premium at their last renewal – each missing out on up to £262.41.
3. Loyalty was the main reason drivers gave for automatically renewing their policy, cited by 30% studied, followed by a lack of confidence switching, mentioned by 22%.
4. The research also found that just 35% of drivers compare their renewal offer with what they paid the previous year, and that only 17% read through renewal information.
5. “Insurers typically use their most competitive offers to attract new customers and rely on existing customers’ apathy to charge higher renewal prices,” said GoCompare founder, Lee Griffin. “It’s time for people to take control of their finances and consider how much they could be saving by switching.”
6. Despite the large potential savings, the study found that 62% of drivers allowed their insurance to automatically rollover at their last renewal, with just 15% checking for better deals.
7. And the findings show that nearly a third of motorists pay for their insurance in monthly installments, particularly those on lower incomes, despite this typically being more expensive.
8. This is largely due to insurers imposing fees and interest changes, meaning that those who can least afford it often end up paying more for car insurance. While it may seem more convenient, in the long term it's almost always more expensive than paying for your insurance up front in one lump sum and switching.
9. This comes after Citizens Advice found that eight in 10 loyal customers pay a “significantly higher price” for home insurance, savings accounts, mortgages, mobiles and broadband. This ‘loyalty penalty’ is estimated to amount to £4.1bn each year, with vulnerable people, such as the elderly and those with mental health issues, disproportionately impacted.
(Source: Theactuary)
