Consumer advocate Mick McAteer is challenging the industry to join with third-sector organisations to develop alternative solutions to support elderly people who are not commercially viable for mainstream providers.
In the Chartered Insurance Institute’s latest Thinkpiece article, Financial Inclusion Centre director McAteer says increasing numbers of consumers are not future-proofed because the state is unable to protect them or they are underinsured.
McAteer calls on the insurance industry to develop alternative, innovative quasi-market solutions. He says: “A partnership model between the insurance industry and third-sector providers – charities and other not-for-profit organisations, NGOs, trade unions, and local authorities – offers the best way of changing the economics of access.”
He says the four pillars that people used to rely on for protection and support – the state, family, employers and pers-onal provision – are crumbling. He says: “The UK needs a new, radical vision of how to fund a dignified and secure old age for all its citizens.”
McAteer says alternative solutions are needed to meet the needs of consumers who need to be insured against longevity risks but are not commercially viable for mainstream retail insurers.
He says: “The need for insurance has arguably never been greater in modern times. If the industry can persuade consumers that it has the products and services they need and can be trusted, then the rewards for the industry will be great.
“Seismic changes in society surely point to a huge opportunity for the insurance industry to help consumers build on the core level of state provision. After all, the essence of insurance is about helping consumers protect themselves against risk. Despite the litany of mis-selling scandals over the past two decades which have left a legacy of mistrust and the doom-mongering about the future of the industry, it is hard to think of a consumer sector with so much potential.”