Industry must dispel insurance myths

The insurance industry needs to make a greater effort to overcome consumers’ feelings that the insurance industry are the ‘bad guys’ and do more to dispel myths surrounding the value of insurance, according to research on underinsurance released by ING.

The research, commissioned by ING and conducted by Galileo Kaleidoscope, found 44 per cent of those surveyed believed that the insurance company would not pay out in the event of an insurance claim and 60 per cent believed their families would get caught up with bureaucracy if they tried to claim.

Gerard Kerr, the head of retail product, marketing and reinsurance at ING Life Risk, said the perception that insurance companies would not pay out in the event of a claim showed that the industry needed to work harder at overcoming the negativity surrounding insurance companies.

There was a myth that insurance was too expensive and likely to impinge on consumers’ lifestyles, Kerr said. More than 43 per cent said they could not afford to pay for insurance, but more than two-thirds of those surveyed overestimated the cost of insurance premiums. The research demonstrated that those with life insurance maintained similar lifestyles to those without it.

Consumers believe that insurance was too complicated, Kerr said. Forty eight per cent of those without life insurance said it was too hard to understand, while of those who had life insurance, 38 per cent said it was too complicated.

The industry must shoulder the responsibility of making sure Australians understand insurance, Kerr said, if they were to close the insurance gap.