Nicola Culley attempts to discover how to broaden the appeal of term assurance.
According to Edwards, the rule of thumb for straight term assurance with death benefits is that any more than 5% difference on price just will not cut it.
“Like all the protection market, term assurance is relatively flat. If we want to grow market share it is a case of taking business from other people,” Edwards said.
“It comes down to being competitive in terms of price, sales, marketing and overall proposition. If the market does not grow organically from where it is we have to start trying to create growth in other ways.”
However, he added it was not sustainable to simply decide to steal from others. And one of the problems, according to Edwards, is there is “not a lot you can do with term assurance” as a product.
He said the applications process could potentially be one area to build on.
With simple life insurance high on the agenda for the Treasury steering group’s recent Review of Simple Financial Products, perhaps a simpler take on the product could be the move forward?
Edwards agreed with the sentiment of the simple life insurance proposals because it meant more people could buy a simple product outside of the IFA community.
But he argued, how can an already straight forward product be made simple?
“We really must stop talking just about products and start talking about the whole customer experience,” Edwards said.
Adviser Lawrence King, chief executive of Catalyst Financial Solutions, said flexibility was the biggest ‘want’ for clients when talking about term assurance. And he added, it was product ability to adapt to changing circumstances that was crucial.
But, he added, the debate always came full circle in that, a product may answer more needs but price will go up.
King said: “Most people are driven by price with term assurance. But unfortunately insurers know this so they do not factor in more flexibility. And actually what people want more than ever now is lower price, so the flexibility they may need in their term assurance cover could fall by the wayside.”
For now then, as the UK economy continues to struggle, demand for term assurance driven by price could spell a flat market for quite some time. And perhaps even a regression away from the all-important product flexibility so many advisers speak of.
