Ian Teague queries whether the industry is delivering the best possible underwriting experience to consumers and advisers.
Simplification strategy
One size doesn’t necessarily fit all, but I don’t think many would argue that a range of simplified products, aggregated simplified processing and simple technology offerings would not help the industry significantly. Interestingly, the iPipeline survey identified that 83% of respondents believed an online POS underwriting tool would prove useful.
However, this is not the only answer to the problem. An overall simplification strategy might well work for the direct-to-consumer or single-tie channel, but consumers have simpler needs and are looking for a purchase experience similar to that of motor insurance.
Good tele-interviewing organisations coupled with aggregated online services can deliver a good experience for both the client and adviser, in both a direct and intermediated environment.
But we also need to find solutions that address the needs of those consumers seeking high-quality service with multiple needs and products. In some cases like these a good disclosure experience, not necessarily a lighter disclosure process, is important.
So, what can be done to simplify buying life insurance for advisers and consumers? A range of solutions is most likely the best response. Clear, targeted client segmentation of the protection market and the buying channels would allow the industry to create a range of different and relevant products, but with consistency across providers in the process required to research and buy.
A clear distinction between fully underwritten and simplified products needs to be made to clients and advisers alike, as well as consideration of full generic underwriting where appropriate.
Simplified products clearly hold some attraction for the market, although it is recognised that some have disclosure concerns, which should be part of the risk undertaken by the life company, not the client or adviser. In this area we need to make sure these products are pointed towards the right customers through the right channels and, in doing so, we compare like with like.
It is difficult to put simplified products alongside fully underwritten products in the direct-to-consumer channel, unless single-tied, because naturally you have dual processes in play and a bad aggregated experience for the client.
The industry must consider the alternative providers and consumer processes out there – which include the likes of Amazon and Google – and the way they deal with technology and data to get things right now and match the use of technology and data by those other sectors.
Addressing the recent Protection Review conference, industry technology champion Ian McKenna warned that the industry must “embrace technology or face extinction”. He is right, having seen how other industries have transformed and accelerated the selling of non-protection products.
So the future needs to be different, with best use of technology and data, consistency in processes and changing the complete culture in client and adviser-facing processes. The industry needs different solutions for different client segments and channels, but a consistency in how advisers and clients interact with the research and buy processes.
Ian Teague is managing director of iPipeline
