• Consumers could save £5.6 billion a year by investing more in risk prevention measures, finds report by AXA

    August 18th 2016. Posted in Insurance

    AXA research reveals that investing in preventative measures to mitigate risks to people’s homes and cars could save UK households £209 a year - an aggregate total of £5.6 billion. Collectively motorists can save £4.96 billion and home owners £620.20 million per year by investing in risk prevention to further protect their vehicles and property. Investing more in flood protection is the most highly valued preventative measure. Eight out of ten UK adults (79 per cent) polled said they would feel more secure if their property had been adapted to feature flood prevention measures.

    Taking simple steps to avoid accidents and investing in preventative measures to mitigate risks could save UK households £5.6 billion per year in insurance costs, according to a new report by AXA Insurance (“AXA”).

    The report by AXA, entitled ‘The Financial and Psychological Value of Risk Prevention’, released today, estimates that the direct financial value of risk prevention measures equates to a saving of £209 per household in the UK.

    Based on calculations and research conducted by Dr Enrico Biffis, Associate Professor of Actuarial Finance at Imperial College Business School, and a poll of 2,000 UK adults, AXA’s data demonstrates the scale of how much the majority of consumers overlook the value of risk prevention. Furthermore, the report suggests that people underestimate the emotional and psychological trauma that the loss, theft or damage of prized possessions can cause.

    The bulk of savings derived from reducing risk can be achieved by UK motorists, who could benefit from £4.96 billion a year from lower premiums. Buying a vehicle fitted with in-built safety systems, such as autonomous emergency braking systems, could save as much as £1.5 billion in car insurance premiums and a further £1.3 billion from a fall in insurance claims. For younger drivers, taking out ‘black box’ insurance could reduce premiums by up to 40 per cent, saving £629 per policy.

    However, polling suggests that many UK drivers do not recognise the benefits of reducing risk. Almost half (44 per cent) of people said they would not be worried if their car did not have an alarm. Over-65s were the most cynical, with 73 per cent saying spending money on a car alarm would not be worthwhile. One in three (32 per cent) of 18-24 year olds agreed with them.

    AXA’s report also analysed the financial value of minimising risks at home, which could save consumers £620.2 million a year in home insurance claims and premiums, not to mention the emotional trauma of having to rebuild or replace parts of your home. Good housekeeping like repairing dripping taps and keeping homes adequately heated could bring down insurance claims by up to £387 million. Simple steps like not leaving spare keys outside the house or avoiding deliveries when there is no one at home, could lead to a reduction of burglary claims of at least £200 million across the country.

    More enhanced security systems, like centrally monitored intruder alarms, bring potential savings of up to 15 per cent on home insurance premiums. However, consumers are equally sceptical about these kinds of measures. 74 per cent of adults polled said spending between £5,000 and £7,000 on security would not be worthwhile and seven in ten (71 per cent) said they would not be worried about their home not having any kind of alarm system.

    The older generation have the same sentiment for securing their homes with technology as they do for protecting their cars. 89 per cent of Over-65s said state of the art security systems would not be worth it, compared to 57 per cent of 18-34 year olds.

    Amanda Blanc, CEO of AXA UK, commented:

    “This report demonstrates clearly the value, in both financial and emotional terms, of taking simple, preventative measures. No one likes to make an insurance claim – if you have to, something has gone badly wrong. While insurers are there to pick up the pieces when the worst happens, giving people that crucial peace of mind, what is often overlooked is the emotional impact of being forced out of your home following a flood, getting in a car accident or losing a treasured possession.”

    “In many cases these shocks are avoidable and stopping them from happening benefits both the customer and the insurer. In short, prevention is better than cure.

    “As our research shows, there are many ways you can prevent the worst happening and having to make a claim. The value of these measures can not only have a profound effect on people’s emotional wellbeing, but, particularly when thinking about major national initiatives such as flood defences, can have a wider economic benefit reaching into the billions.”

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    Notes for Editors 

    Methodology

    Research relating to the financial impact of protection was conducted by Dr Enrico Biffis, Director of RISX Ventures and visiting associate professor at Imperial College Business School.

    All findings assessing the psychological value of protection and prevention measures are based on a representative survey of 2,065 UK adults. The poll was conducted Populus, the research company, between 3 and 5 June 2016.

    The full report is available on http://www.axa.co.uk/newsroom/media-resources/resources-and-publications/

    Legal Notes 

    AXA Insurance

    AXA Insurance is one of the largest general insurers in the UK and underwrites a broad range of products for individuals and businesses. Products are distributed primarily through brokers and corporate partners with home, travel and pet insurance offered directly to customers through its website www.axa.co.uk and Swiftcover. AXA car insurance, launched in February 2010, is the fastest-growing motor insurance product in the history of UK motor insurance. AXA Insurance is part of the AXA UK group of operating companies.

    AXA

    The AXA Group is a worldwide leader in asset management, with 161,000 employees serving 103 million clients in 59 countries. In 2014, IFRS revenues amounted to Euro 92.0 billion and IFRS underlying earnings to Euro 5.1 billion. AXA had Euro 1,277 billion in assets under management as of December 31, 2014. In 2015 Interbrand ranked AXA the 1st insurance brand worldwide for the 7th consecutive year.

    The AXA ordinary share is listed on compartment A of Euronext Paris under the ticker symbol CS (ISIN FR0000120628 - Bloomberg: CS FP - Reuters: AXAF.PA).

    Our previous company performance is not a guide to how we may perform in the future.

    Any opinions expressed in this media communication are made as at the date of this publication but are subject to change without notice.