The Gender Directive is creating a fluid situation in protection markets, with insurers only just coming to conclusions. Andy Milburn outlines the state of play so far.
Intermediaries could consider a separate communication exercise for male customers who have a small amount of income protection cover already; and/or have no income protection cover in place.
3 Contact local businesses
Intermediaries could consider contacting local businesses. An idea may be to offer to provide information to their employees on the gender directive and how it could affect them, in particular females.
4 Maximise coverage
Customers ought to aim for the most sum assured and financial protection they can afford to buy, if it suits their financial needs. Here are a few areas of additional insurance cover intermediaries could highlight:
- Family income benefit and low start plans maximise the sum assured for the same starting premiums.
- Indexed plans could provide additional cover for customers in future but based on current premium rates (i.e. gender-specific).
- Adding some critical illness cover might also make sense to some of your existing customers.
- The flexibility and additional coverage of two single life type cover versus joint life cover could also be of benefit to customers.
5 Tell introducers about the changes
Intermediaries could make sure their existing introducers are fully aware of the gender directive and what it could mean for them. The introducer can then recommend that their customers should speak to protection intermediaries about the impact of gender-neutral pricing should they need more detail or wish to update their financial protection.
6 Lapse management
Customers who have allowed their existing policies to lapse may not realise what they are giving up. So it is worth intermediaries highlighting to protection customers the potentially higher costs they may incur in future if they wish to buy new replacement cover on or after 21 December 2012.
Customers with applications in providers’ underwriting pipelines will require serious attention over the next few months. Customers whose application requires a GP report or medical could be penalised if their application is submitted to the insurer before the deadline but does not go on risk / see terms offered until on or after that date.
Ageas Protect announced details of its G-Day protection promise at the end of July aiming to help customers likely to be stuck in the underwriting pipeline before midnight on 20 December 2012. Expect a number of providers to follow with announcements on their plans throughout August and September. The customer stuck in provider’s underwriting pipelines is the most important person here. We have to do what is best for them.
Providers will also have to change their premium guarantee periods in the 30 days leading up to “G-Day” as they cannot guarantee that premium if it is gender specific for certain customers on or after 21 December 2012.
Some providers who still rely heavily on GP reports may have to ramp up their manual underwriting resources to look after customers in their underwriting pipeline affected by the changes in the weeks following 21 December 2012.
Providers and intermediaries who focus on online underwriting processes should be better placed in this situation.
Andy Milburn is head of marketing at www.AgeasProtect.co.uk