27 January 2010
PPI costs too high
For insurance providers, the savings and protection survey for the fourth quarter of 2009 makes for gloomy reading. Almost one third (31%) of the 2,500 working adults surveyed said they were more concerned about losing their jobs than they were three months ago. The same proportion expect the economy to deteriorate further over the next year.
Despite the fact that two-thirds believe they would cope badly if they lost their job (including one third who believe they would cope ‘very badly’), just 16% hold mortgage payment protection insurance. Life insurance is typically the most commonly held product, owned by 47% of working respondents. Of those that had previously held protection policies, the most common reason cited was that it had become too expensive (30%).
Sally Bowyer, managing director of leading financial claims company BrunelFranklin.com believes insurers are trying to pass on the costs of refunded insurance premiums to mis-selling victims: ‘These insurance companies are now being forced to make payouts to consumers and we believe they are trying to recoup their losses. So many people have been mis-sold payment protection insurance and this is finally getting the public’s attention and in many cases is being refunded. The consumer has lost faith in the financial services industry and passing these costs on to policyholders will only make people more wary about buying insurance.’
