However, ’there is a growing issue that getting credit – and credit cards in particular – is becoming more difficult,’ says strategy, marketing and communications director
Insurance customers are increasingly leaning on credit to buy cover, new research from premium finance company Premium Credit has shown.
In a statement released today (12 July 2023), Premium Credit highlighted that 70% out of 1,106 adults used some form of credit to pay for one of more types of cover during March 2023 – including credit cards, loans, premium finance and finance from insurers.
Whereas in March 2022 and October 2021, those that used credit sat at 66% and 69% respectively.
Premium Credits’ representative sample included 1,026 adults in March 2022 and 1,017 adults in October 2021.
“Using some form of credit to pay for one of more insurance policy is widely accepted, although many people may be unaware they are using credit when they finance from their insurer,” said Adam Morghem, strategy, marketing and communications director at Premium Credit.
“While customers are becoming confident about using credit to buy insurance, there is a growing issue that getting credit – and credit cards in particular – is becoming more difficult,” he added.
The firm found around one in seven (14%) adults said they had found it harder to borrow due to cost of living pressures and 17% said they had been rejected for credit cards.
Financial confidence
Despite this, the company noted that financial confidence may be the driver for people using credit more.
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More than a third (35%) of those who were more accepting of credit said it was because they had become more financially savvy, while 33% said credit was more available and 20% said they were better off and more comfortable using credit.
At the same time, 24% of customers stated they had become happier about using credit to fund cover – up from 23% last year.
Savings drop
However, Premium Credit said another reason for the rise in credit use was due to people having a lack of savings available.
Some 41% said their level of savings had dropped due to cost of living pressures and 12% reported they had no savings at all.
And around 17% said their level of savings had dropped dramatically – compared to 20% that said their savings had increased.
“Premium finance is specifically designed for insurance buyers to help make important insurance policies affordable and improve cashflow,” said Morghem.
“It is a very cost-competitive means for consumers to buy insurance and better manage their finances through spreading payments.”
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