When it comes to product development plans, health and protection providers need to stop repeating past mistakes and look to the future, says Wojciech Dochan.
Jack Trout, a famous strategist, said: “Good business is always the result of great ideas, but great ideas don’t always result in good business.”
The financial services sector is littered with the debris of broken products, with the latest being PPI.
Despite the opportunities that the changing landscape in pensions is offering, health and protection providers are not moving quickly enough to seize the moment and meet the future needs of their customers.
The protection industry is still focused on designing products by internal committees and failing to really engage with customers.
Every employer in the UK will eventually need a pension scheme and automatic enrolment from 2012.
The launch of the National Employment Saving Trust (NEST) will fundamentally change the pensions landscape and, along with it, the need for health protection.
NEST’s predecessor, the Personal Accounts Delivery Authority, carried out research in 2008-09 with a representative sample of more than 3,000 organisations in the UK.
It showed that 90% intended to seek external advice to help them understand the impact of the workplace pension reforms that will start to be introduced from 2012.
This creates opportunities for health and protection providers to come up with imaginative solutions that work alongside the new pension arrangements for businesses, especially in the important small business sector.
Instead, protection providers have over the past 12 months been coming out with a series of headline-grabbing statistics about the protection gap.
This is not a new issue. The market leaders in group risk and private medical insurance (PMI) should be innovating for these changing times.
MAKING THINGS CLEAR AND EASY
Confusion and complexity still shrouds the health and protection products offered by providers.
Repeated research shows that consumers are confused by the sheer number of products, unclear about the differences between them and are suspicious that they will be “caught out” by schemes not paying out at the point of need.
In the world of PMI, premiums have continued to rise above the rate of inflation, consumers currently consider PMI a “perk” if offered with a job, and the high cost stops it from being considered a necessity to be brought privately in large numbers.
Group income protection’s main product features have not been altered, but the recent emphasis on EAPs and the prevention of absence and rehabilitation should be a pivotal ingredient to the new world of welfare reform.
There is a real need for providers to work more closely with both the NHS and Department of Work & Pensions.
The news that the ABI and British Medical Association (BMA) agreement on GP report (GPR) fees has broken down will usher in a period of uncertainty.
Lack of innovation investment in the UK insurance market has been highlighted by recognition of RGA's work in the US.
Protection business in 2012 and 2013 will be affected by events this year and some fundamental changes to the way customers policies are priced into the next. Richard Verdin explains.
Employee assistance programmes are in the spotlight due to a schizophrenic approach by government. But as Sue Weir points out, they are backed by solid research.
How will people buy insurance in future? Greg Becker visits the US for developments in online distribution.