In a study published by Swiss Re it would appear that Europe’s life insurers are missing out on a potential 25 billion Euro in premiums annually because consumers are underinsured by 10 trillion Euro ($13.34 trillion). The perceived cost of life insurance prevented many consumers from buying adequate cover, said Swiss Re.
“There is a huge gap in protection. It varies by country but there are hundreds of thousands of under-insured people who need the financial protection provided by life insurance,” Martin Albers, Head of Swiss Re’s Europe Division, said in a statement. “Making even small inroads into this gap can translate into significant opportunities for this industry,” he said.
The Zurich-based reinsurer said it surveyed more than 11,000 consumers in 12 European countries it considers key markets. These were Austria, Denmark, France, Germany, Italy, Netherlands, Norway, Poland, Spain, Sweden, Switzerland and Turkey.
The 10 trillion Euro shortfall in cover corresponded with the gap between the amount of money available to dependents in the event of an untimely death, disability or critical illness and how much consumers actually need to ensure their dependants’ financial needs are met.
The study assumed an average premium rate of 2.5 Euro for every 1,000 Euro of cover, meaning life insurers were missing out on 25 billion Euro in premiums every year, Swiss Re said. Only 11 percent of respondents across Europe claimed that they and their dependents were well positioned financially if they died, or suffered a long-term illness or disability. But the cost of increased cover was in fact within what many said they would be prepared to pay, Swiss Re said.