Small business leaders do not trust insurers promoting the importance of cover for their employees and organisations, a Department for Business, Energy & Industrial Strategy (BEIS) commissioner has warned.
Liz Barclay, small business commissioner at the department, said this meant trusted third parties had a crucial role in communicating to businesses the importance of taking out protection insurance in particular.
Speaking at the Financial Inclusion Commission virtual summit, Barclay said there was a lack of trust when it came to SME leaders taking out group income protection cover.
“I do know that there is a big, big trust issue as far as insurance is concerned and it’s partly because of this whole thing that you feel as if you’re paying constantly for premiums but you’re never going to get any of that money back,” she said.
“So I do think the argument that a trusted third party comes along and says: ‘What about protection? You need to build your resilience, here’s how you might do it’ – that is something that needs to be considered.”
Barclay was echoing Association of British Insurers (ABI) director of general insurance James Dalton, explained that if insurance industry members approach consumer groups saying they should protect themselves more, they tend to take that message with a “very large grain of salt.”
“It just seems like the insurance industry trying to flog more product,” Dalton (pictured) said.
He agreed it was vital to get more support and buy-in from outside people and organisations.
“I think one of the real absences we’ve got in the space of financial inclusion is genuinely independent third-party voices who seek to explain to consumers the importance of protecting themselves, their loved ones and their possessions through the use of insurance,” he continued.
“You can do lots of explaining. You can do lots of signposting and we have done that as an industry genuinely, but I think it does have to come from trusted third parties like the third sector or the government.”
