The figure referred to surrenders of life and pension policies in their first year alone, but insurers are keeping the true scale of the problem under wraps, the association claimed.
In the light of the scandal over poor pensions advice, lapse rates should be used to clamp down on companies that mis-sell insurance and pensions, it added.
Jean Eaglesham, head of money policy, said: 'Information on how long insurance policies last, and who sold the ones which are most often cashed in early, is crucial to consumers. It puts an insurance company's record on public view.'
Recent figures showed nearly one in four unit-linked life policies and more than one in four unit-linked pensions policies lapse. For other policies, the rates are 15.4 and 23.7 per cent respectively.
The association wants to see regular publication of information on how long policies last and who sold the ones that lapse most. It is also pressing for publication of 'trigger' levels of persistency of policies - so that if a company's representative falls below, the advice he or she offers can be investigated.
'Poor advice often leads to a discarded policy. Every year millions of investors lose out,' Ms Eaglesham added.
The association's magazine Which? criticised the high cost of credit insurance on a personal loan which adds, on average, 65 per cent to the cost of borrowing.Reuse content