The Association of British Insurers (ABI) has stepped up its defence of payment protection insurance (PPI) by releasing unemployment figures it says demonstrate its value.
According to ABI data, unemployment claims on PPI jumped 118% between November 2007 and November 2008 - from 8,772 to 19,105.
The Competition Commission (CC) has criticised the PPI market as part of an ongoing review into the product after floods of complaints of mis-selling by consumers.
Additionally, the FSA last week welcomed a move by several banks to stop selling single-premium PPI and urged other providers to take note.
But Nick Starling, ABI director of general insurance and health, says: "Many people are already feeling the effects of the recession, through rising unemployment.
"Losing your job is stressful enough, and even more so when you don't have any protection in place to help ease the financial burden.
"These figures are alarming, showing just how valuable PPI, and other types of protection insurance, are during difficult economic times."
Banning the sale of single-premium PPI was part of the CC's provisional "remedies" for the market, which also included a prohibition on the active sale of PPI by "a distributor to a customer within 14 days of the distributor selling credit to that customer".
But the ABI said some of the CC's remedies could be detrimental to consumers.
Speaking in June last year, Starling said: "We acknowledge that there have been problems in the PPI market and we have done a lot to change that; these changes now need time to bed in.
"We are very concerned that the Competition Commission's proposed remedies could destroy this market, particularly while we are facing a period of economic uncertainty. It would be disastrous to leave many people unprotected to deal with unforeseen financial crisis."IFAonline
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