Insurance provides households with protection against financial hardship in the face of income shocks such as unemployment, illness, and bereavement. However, as a result of the poverty premium in insurance, vulnerable and low-income consumers often cannot afford, or are altogether excluded from, insurance that would provide protection from such shocks.
The IFoA, together with Fair By Design (FBD), have produced a joint report, The hidden risks of being poor: the poverty premium in insurance, exploring the prevalence, key drivers and impact of poverty on vulnerable consumers. The report has been informed by extensive engagement with regulators, civil servants, insurance practitioners, and consumer advocates, as well as people with lived experience of poverty. It makes recommendations for the Government aimed at improving access to insurance for these consumers.