Jo Miller goes through the key findings of this year's major report by The Syndicate into the public's attitudes to the protection industry
What if? It’s an essential question in our industry. What if you’re involved in a serious accident and can’t work? What if you’re diagnosed with a serious illness that means you need to take time off work? What if, as the main income provider for your family, you are unable to provide due to circumstances beyond your control?
We need people to ask these questions in order for them to consider purchasing protection insurance. We need people to give these possibilities serious consideration to even entertain the idea that our products have a valuable role to play in helping them out of a difficult situation. We need people to seriously consider all the bad things that could happen and how difficult it could get for them and their family.
Previous reports by The Syndicate have highlighted the ‘Casino Mentality’ and the concept of the ‘Optimism Bias ‘ whereby people discount the real risks that they face in favour of focusing on the positive. And who can blame them? This mindset doesn’t make for a pleasant purchase experience.
What if the product doesn’t deliver?
However, research this year by The Syndicate revealed consumers asking a very different ‘What if?’ question and it is one that the industry needs to address sooner rather than later. The research, which aims to explore consumer attitudes towards insurance, asked whether people felt that protection insurance products would deliver what they promised.
Life insurance fared the best, with 41% of people believing that it would deliver on its promises, but income protection and critical illness scored only 24% and 27% respectively by comparison.
When the responses of those who were unsure were taken into account with those who were certain that it wouldn’t deliver, the proportions of people not believing that our products deliver on their promises sits at around 45% for income protection and critical illness, falling to 36% for life insurance.
So having managed to get people to ask the big ‘What if?’ question and investigate taking out protection insurance, they are then asking themselves ‘What if this doesn’t deliver?’ Asked as part of a purchase process, this inevitably leads to the very real dilemma, namely ‘What if this isn’t worth it?’.
Let us not forget that we are competing against savings, which people see as the ultimate form of protection.
People find it easy to contemplate saving: they are in control of how much they save, they have flexibility over the payments and, ultimately, if the worst doesn’t happen, they have a treat in store.
Savings may be easier to contemplate but, as previous research by The Syndicate has shown, most people rely on savings to fulfil more than one role and they do not therefore represent a safe option for many, despite consumer perceptions.
Where would we suggest that the unsure consumer, the one asking the wrong ‘What if?’ question, goes to be convinced? The same research shows that people were reluctant to recommend an insurance product, believing that this sort of advice should be given by a professional.
However, 55% of people said that hearing about someone with a positive claims experience would make them more likely to make a purchase (unhelpfully, only 8% of people were able to say that they knew someone who had had a positive claims experience).
The message for the industry is clear: we need to get the positive case studies out there, to underline the authenticity and the benefits of our products. Familiarity with the product is essential if we want people to seriously consider the merits of investing in protection.
The value of the products needs to be clearly visible and the ‘What if?’ question on the minds of the consumer needs to be more along the lines of ‘What if I could protect my family and get peace of mind?’, and even ‘What if it was easy to protect my family and get peace of mind?’.