When it comes to hot topics for intermediaries, the rise of automated advice is never far from the top of the agenda, writes National Friendly's Jonathan Long.
When it comes to hot topics for intermediaries, the rise of automated advice is never far from the top of the agenda.
Whether its online insurance comparison sites, retail banking apps or digital life insurance applications, technology is playing an ever-greater role in making financial services more convenient.
However, whilst technology is very much on the rise in the protection industry, intermediaries should not underestimate the important insight and support that their professional service can also provide for consumers who are considering Private Medical Insurance (PMI).
Part of this reasoning is that digital solutions are not always the chosen purchasing method of some consumer demographics. Statistics from the ONS show that just 42% of Britain's over-65s had bought anything online in 2015, let alone taken out an insurance policy.
More recent figures from 2016 have revealed that many older people are still not online, with two thirds of women over 75 having never used the internet.
Furthermore, whilst almost all adults (99%) aged 16-24 were recent users of the internet, just 39% of adults aged 75 years and over had recently gone online.
This could be a result of the nature of many online applications where customers are not able to talk a choice or decision through before committing, which might leave such customers unsure about whether they've taken out the correct policy.
Alternatively older consumers could prefer a face to face interaction.
By contrast, professional advice, whether over the phone or in person, gives these customers much greater surety when taking out a policy, as they are able to get a recommendation from a trusted adviser.
Advisers can clearly spell out to these individuals what their policy will cover and whether it suits their needs, which will help to avoid any nasty shocks when it comes to making a claim.
Whilst many providers have taken great strides to explain what their policies do and do not cover, choosing the correct product can still be a little overwhelming for some consumers. Technology can help us to explain policy details online, but professional advice can often be essential in helping to find a product that fits a particular customer's needs.
By speaking to an intermediary, these individuals can find out the exact details of the policy, which will help them to understand exactly what their policy covers. Speaking to an intermediary therefore remains an essential part of securing the best insurance for a customer's needs.
A familiar face
Taking out a PMI policy can be a very personal decision for many people. For example, some consumers may have had a bad experience with public healthcare in the past or suffered from a previous illness that they might not want to disclose online.
For many older people, I believe there can often be an issue of trust when sharing personal details or making purchases online. Advisers can be a familiar face with whom to discuss these very personal issues, particularly if they have provided advice in the past.
Direct, professional advice from an intermediary can be essential in building a connection with clients. This can help advisers to better understand their clients' needs and provide them with appropriate solutions that fit their needs.
Whether it's helping your client to imagine the difficulties they might face waiting for treatment on the NHS, or perhaps discussing a negative experience they may have had in the past, these emotional connections can only be created via a genuine interaction with an adviser who can clearly express the benefits that PMI can offer.
Adding value where it counts
In many cases, consumers often base their decisions on the advice and recommendation of a trusted intermediary, which is something automated advice simply cannot offer. However, whilst human interaction and professional advice remains essential for many consumers, intermediaries will still have a vital part to play by showing consumers where they add value.
Intermediaries who proactively monitor their back books and engage with existing clients can easily differentiate themselves from digital-only offerings.
Maintaining regular contact and keeping up-to-date with changes to your clients' circumstances is crucial to building strong relationships and showing your clients that you understand their needs.
This doesn't mean the industry should shy away from technology, however. New systems that bring applications online, removing unnecessary mailing times, or that allow intermediaries to easily compare products can help them and their clients to find the best products and complete applications more easily.
Systems like these could also help intermediaries to reach out to more tech-savvy consumers, who may be more inclined to complete an application if they can fill in the details themselves.
By speaking to an intermediary, all of these different customers will have the best chance of finding the right product, whether they have suffered from an illness in the past or if they want greater clarity on what conditions a policy will and will not cover.
Intermediaries will, therefore, undoubtedly remain an essential part of the process of choosing a PMI policy.
Jonathan Long is CEO, National Friendly
 P2, 5th bullet point under ‘main points' heading: https://www.ons.gov.uk/businessindustryandtrade/itandinternetindustry/bulletins/internetusers/2016
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