According to findings from GlobalData’s 2020–21 UK Insurance Consumer Surveys, 52% of UK consumers in 2021, compared to 37.4% in 2020, stated that their decision to buy income protection insurance was influenced by the COVID-19 pandemic.
Beatriz Benito, Senior Insurance Analyst at GlobalData, says: “Individuals have become increasingly wary about the unprecedented events of the last two years, rethinking how best to protect themselves now and in the future. The UK’s furlough scheme prevented mass redundancies, yet many individuals still felt the financial squeeze. Some consumers may feel more vulnerable to job losses and health concerns than in the past and are therefore examining ways of protecting themselves in an uncertain economy.
“Equally, the pandemic has increased awareness about the importance of health and wellbeing. Many individuals may not have the funds to support themselves or their families if they were to fall sick and be out of work and short of income for an extended period of time.”
GlobalData’s survey also reveals that accident and sickness cover was the most purchased type of personal income protection policy in 2021 with a 44.6% purchase share.
Of all income protection products sold, 55.4% provide cover against redundancy – either unemployment insurance or comprehensive income protection. In addition to providing unemployment cover, comprehensive policies also offer protection in the event the policyholder becomes unable to work because of sickness or an accident.
Benito adds: “Soon after the onset of the pandemic, insurers temporarily withdrew unemployment cover as the prospect of high unemployment loomed. Had they not discontinued products temporarily, the proportion of income protection policies accounted for by unemployment cover would be significantly higher today.
While societies around the world learn to live with the virus, new variants continue to create economic uncertainty, impacting consumer behavior. As such, COVID-19 will continue to drive interest in income protection products over the medium to long term.”
