Legal & General is calling for automatic enrolment to be extended to long-term care products and income protection.
In an interview with the Financial Times, L&G chief executive Nigel Wilson also calls for pensions auto-enrolment to become compulsory, rather than the current opt-out model.
Wilson said: “We would like to play a bigger role in welfare reform. We have done a great job in auto-enrolment and creating pensions for everyone but there are many other products that fit that category, where the state will not be providing as much of it going forward.
When asked if it should be compulsory, Wilson replied: “Yes, we do it for motor insurance already. Pensions auto-enrolment has about a 92 per cent take-up and we would like to see that move from soft to hard compulsion. But there are other products around long-term care and savings we would like to see introduced.
“It is modest amounts: pensions auto-enrolment is 2 per cent of salary and these products could be as little as £10 a month. It is to look after people on rainy days and reduced the pressure to go to payday loans.”
Wilson also said the insurer will start lending to medium-sized UK companies next year as it looks to take on the banks.
He wants to capitalise on firms’ reliance on traditional funding sources and focus on lending as little as £20m for 10 years.
Wilson says: “It is disappointing, to say the least … that we [insurers] haven’t developed this as a business.
“We will step up and take over some of the roles that the banks have fulfilled over the past 20 years.”
L&G’s move follows growth in peer to peer lending to firms a alternative funding sources grow for SMEs and larger firms.
Last year, Money Marketing revealed the Department of Work and Pensions wanted a debate on income protection auto-enrolment.
A very senior official called on firms to make the case to ministers.