Buying attitudes must change to boost uptake

Attitudes surrounding the purchase of insurance must change if the sector is to continue to be profitable.

That is the opinion of Professor Howard Kunreuther from the Wharton School in the US, speaking on a panel at the UN Financial and Private Sector Disaster Resilience Global Summit in London yesterday.

“We must look to change the availability bias that currently exists whereby people buy insurance after the event has occurred, rather than preparing for the inevitable,” he said.

“The 9-11 disaster is a perfect example. Before the event no one considered the need for terrorism insurance and once it had occurred, terrorism was viewed as uninsurable.”

Kunreuther also said that the perception surrounding insurance needs altering. “We need to provide better information so that people realise that the best return on a policy is no return at all. If no event occurs, this is a good thing,” he said.

The panel also included Frans Berkhout from Future Earth, International Council of Science; Dr Greg Holland, NCAR, Boulder Co; Dickie Whitaker, co-CEO, OASIS Loss Modelling Framework; and Robert Muir-Wood, chief research officer, RMS. It focused on the impact of science with regards to modelling and the analytical future of the insurance industry and wider economy.