The IP Task Force was formed in 2006 with the aim of improving the product and increasing sales. Peter Le Beau shares the lessons he has learnt since its launch
When Clive Waller and I decided to follow up adviser and industry research by forming the Income Protection (IP) Task Force, we received lots of support from across the protection industry. That was very much as expected as having both been closely associated with the product for over 30 years we knew there was a great deal of goodwill towards IP.
This goodwill now needs to be revived and turned into action, and in some cases funding, for the project to succeed - and this will always be the hardest challenge.
What has come as a surprise is some protection players' micromanagement of budgets where reasonably moderate corporate expenditures require regular analysis and review. Reminiscing over the millions of pounds insurers have lavished on defunct or ill-fated IT projects, it is astonishing to see only a few hundred pounds here and there has been put aside to galvanise IP.
I am avoiding using the term 're-galvanise' and with good reason. I am not sure that even during its peak in the early 80s the product was entirely known or understood by many consumers, brokers and insurance salesmen.
High hopes
If we regard the modest IP sales of the past as the product's heyday, we are limiting its potential. Instead, it should be considered that the best is yet to come. If that is wrong then we have failed in our quest.
Since its inception, the IP Task Force has learnt a few lessons as to why the cover is unsold. The first is that companies are very busy and while they will support initiatives, they may not have enough time to drive them in the way they would like to.
This is not a criticism of the UK market but an observation. We have huge talent in all parts of the task force and this was one of the most encouraging aspects when we originally developed the initiative. We have been able to unite not only companies who care about IP but also lots of very bright people who would love to see the product flourish except this often conflicts with their day jobs.
This is one of the reasons why we have recently formed a five person executive team. Apart from Clive and myself, we have Karin Lloyd who is one of the most experienced disability claims technicians in the world. She has s strong underwriting background after an international career at Swiss Re, and is au fait with all major markets of the world. Alan Tyler is one of the best-connected people in our industry in terms of relations with key people driving the UK Welfare Reform. Alan is an expert on group and individual IP and understands how the Government approaches a challenge like Welfare Reform and where the insurance industry may fit into the process. Finally, Roy Mcloughlin brings a skilled and knowledgeable adviser perspective to the task force, has a passion for the product and is constantly aware of any sales proposition's key component - the customer.
A recent trip to the US woke us up to the scale of the task we have undertaken. There we saw three organisations dedicated to promoting the value of protection and raising awareness that disability can happen to anyone. It made us realise we need to make our new website more consumer-orientated and include hard impact case studies and information that users can adsorb and relate to. The challenge is to do this as effectively as it is done in the US where budgets, like portion sizes, exceed ours.
However, recent discussions with Which? have taught us a second lesson.If we are going to raise the profile of this product we must start by reaching the hearts and minds of consumers. This will not be achieved by sitting in stuffy offices debating subjects such as the limitations of the benefit clause.
We are committed to promoting a resource that explains the dangers of becoming disabled in the UK without an insurance safety net such as IP. As an industry, we owe it to the public to do this. It has prompted us to schedule the subsequent White Paper to follow shortly after Employment Support Allowance replaces Incapacity Benefit in October. The public and political reaction to a move that may cut numbers on benefit from 2.7 million to 0.7 million will be worth waiting for. Maybe when people are denied benefits the Task Force may see a shift in the perception of IP. Timing is everything in promoting ideas and well-tuned arguments and we are looking at other ways to intensify the IP debate over the coming months.
Back to basics
Another challenge is persuading advisers that IP is a good product to sell - that it meets the right needs in the right way and can be underwritten and issued quickly at a reasonable price. Adviser awareness of IP could be dramatically improved but until the product becomes more user-friendly and easier to sell, there is no point in attempting this. We therefore have to follow the Association of British Insurer's Protection Committee's initiative of trying to simplify the product without evoking fears that anyone who does this will be liable under the Competition Act, leading us to the third lesson.
Finally, we need to engage with advisers to teach them about IP and present a clearer and more appealing proposition.
Those are three big challenges, but we always knew promoting a product that has languished throughout its entire existence would never be easy. Cynics may argue there is a reason for this almost permanent state of sales depression. They of course might be the same people who have involved the industry in previous mis-selling scandals or who have never tried to sell to client needs when there was other easier money to be made. This attitude will not deter the IP Task Force from pressing on with our agenda. If a battle is worth fighting then it is worth winning and while sales of IP may take time to gain momentum we have every faith they will.
- Peter Le Beau is managing director of Le Beau Visage and co-founder of the IP Task Force.
