Reinsurer accepts criticism of protection gap
Swiss Re, the reinsurer, says it agrees with those who criticise its ‘protection gap’ calculation as meaningless for consumers.
The protection gap is a measure of the difference between the level of cover UK consumers have and what they need, and has been calculated and published by Swiss Re for the past 10 years.
The latest available figures, for 2011, put the life assurance gap at £2.4 trillion and the income protection (IP) gap at £190bn.
Industry commentators have often levelled criticism at the concept of a 'protection gap', arguing that it is too large a number for consumers to understand and is therefore rendered meaningless.
But speaking at a Protect event this week, Ron Wheatcroft (pictured), technical manager at Swiss Re and a judge at the Health Insurance Awards, told the audience that the reinsurer never intended for the protection gap concept to be used as a consumer message.
He said: “I agree with anyone who says that it is too big a number to comprehend.”
Wheatcroft went on to suggest that the protection industry should now be more concerned about the IP gap than the life assurance gap.
He said the life gap has grown by 20% over the past 10 years while the IP gap has increased by 46% over the same period, and said the industry “needs to push IP harder”.