There is reportedly a “real concern” that vulnerable adults could be taken advantage of by profiteering insurers, warns Ian Hughes, CEO of Consumer Intelligence.
The warning follows data that shows the amount of UK customers identifying as vulnerable has doubled within a year, with 26% of the adult population now claiming to be a vulnerable person.
The ongoing pandemic has also sent concerns about health and personal finances “rocketing”, according to new research from data insight specialist Consumer Intelligence.
The FCA defines a vulnerable customer as someone who due to their circumstances is “susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”.
Factors to be considered amongst vulnerable customers include health factors, life events, capability or skill levels, and financial and emotional resilience. Consumer Intelligence said that the pandemic has also “pushed more people to and over the edge into vulnerability”.
The findings from the group’s vulnerable customers report raised a “number of concerns” for insurers to address around understanding how vulnerability impacts consumer behaviour and what actions they should take to ensure they do not suffer a detriment as a result of coronavirus.
The research also revealed that vulnerable customers are more likely to automatically believe what an insurance company tells them, heightening the “potential for harm if a company does not communicate with transparency”.
Consumer Intelligence CEO Ian Hughes said: “Stressed, worried, and distracted people – especially those under financial pressure – think very differently about insurance, interact differently with insurance companies, shop differently and claim differently.
“Understanding behaviour and supporting the needs of those customers is vital – but not enough.”
He added: “Insurers must act now to make sure they aren’t contributing to the detriment vulnerable people are experiencing through their interactions, or negligence. This group makes up a large part of insurers’ customer base.
“They need the protection of insurance more than ever, and they need the protection of insurance companies to ensure they’re getting the right information at the right time, the right cover, and the right price.”