APPG: COVER convened with industry experts and politicians to debate the Promoting Protection campaign
By Johanna Gornitzki
The price gap between advised and non-advised protection sales needs to be addressed to ensure consumers buy protection that is right for them, according to the All Party Parliamentary Group (APPG) on Insurance and Financial Services.
Following a meeting with three industry experts on how to raise awareness of protection, orchestrated by COVER, APPG chairman John Greenway MP said: "We want to see people being able to buy the right thing as opposed to the wrong product. The gap between advised price and non-advised price is growing - and we have to deal with this."
Agreeing with Greenway, Kevin Carr, head of protection strategy at LifeSearch, argued that the Financial Services Authority has to level the playing field between advised and non-advised sales, saying the cost of advice is currently more expensive due to the regulatory framework.
Carr added that offering advice on protection is key to the success of the protection market.
"Consumers make poor choices when buying without advice. They are led to believe they can make an informed decision, but are rarely 'savvy' when it comes to choosing the most suitable product. This is not their fault. It is because, generally, most consumer knowledge comes from two places; the company they bank with and the company they borrow from, and, if neither of these sell the most suitable products, consumers are, innocently, unaware of their options," he said.
Also speaking at the meeting were Professor Michael O'Donnell, chief medical officer at Unum and Nick Starling, director of general insurance and health at the Association of British Insurers, who both agreed that having the right protection in place is of utmost importance.
O'Donnell said: "I firmly believe that protection insurance is essential. However, people just don't realise that it shouldn't be bought in the same way as motor insurance."
Calling for a Government publicity campaign, he urged the Government to make its benefit system much more transparent. "People need to understand how much they will get from the Government."
Meanwhile, Starling suggested that tax relief should be given to companies offering protection packages to their employees.
Edward Leigh MP replied that tax relief on premiums would, in the longer term, be "very affordable to the Government".
Lord Brookman, Lord Hunt of Wirral, Baroness Turner of Camden, Lord Davies and Peter Bottomley MP also attended the meeting.
n For more information about COVER's Promoting Protection campaign, please visit www.promotingprotection.co.uk.
