COVER approached the protection industry to uncover the hopes and predictions of advisers for the year ahead.
Debbie Kennedy, chief executive officer, LifeSearch:
"Consumer Duty will no doubt be the foundation to build upon for better value and customer service. Beyond this, I think it will also be simple economics that create some of the biggest changes in 2024. We are already starting to see a shift in our value chain. With lead generation under pressure on both cost and ultimate quality, distribution will seek other ways to acquire customers.
"One of the key changes we will see in 2024 is a move away from segmenting distribution by ‘advice' and ‘not advice'. Instead, the lines will be drawn around the quality of distribution and lifetime value of the customer. Conversations I'm having are revealing exciting opportunities to take protection to customers, where through a combination of technology and talent, we can reach groups of new customers, and on their terms.
"To grow our market, we need to break out of our traditional bubble, and collaborate with brands outside our world. Embedded insurance is growing in popularity in the GI sector and I predict we'll see the first ventures into embedded protection soon (and I don't mean PPI!).
"Where I see AI making a positive difference is in ‘automating the mundane' and bringing together technology and humans to deliver better customer outcomes. At LifeSearch, we're already using machine learning to improve our call handling experience. AI may enable insurers to break the circle of frustration in delivering system changes.
"Value will continue to dominate. Value over price, value over volume and value that is fair. We have some challenges for sure, particularly in the underwriting sphere. We're working with reinsurers and insurers to improve the experience and extend access, while contending with everyday factors - one in three Gen Z's experience anxiety every day; more people live with health conditions; and we all suffer from the increasing pressures on the NHS. There is life beyond ‘clean lives', and I expect to see more flexibility in product coverage and underwriting practices in 2024."
David Mead, director, Future Proof:
"For the coming 12 months, the impact of Consumer Duty will become more apparent. Distributers, enabled by providers, who offer loaded premiums are likely to have to re-think their strategies. It's hard to see how they can in any way be justified, and the PDG will campaign tirelessly to have them confined to history.
"Income protection will continue to go from strength to strength, and I don't think it will be too long before IP sales outstrip critical illness sales. Whoever would have thought that was even vaguely possible just five years ago?"
Matthew Chapman, commercial director, Plus Financial Group:
"In 2024, I would like to see providers working far more collaboratively with advisers and distributors on impactful initiatives. A common request from advisers that remains unaddressed is the implementation of tools such as ‘meaningful' annual statements designed to help drive reviews, keep policies on risk and to remind clients both what core cover they have and the value-added benefits available to them.
"I would like to see more providers introducing the option of online digital trust forms to help increase the number of life policies being placed in trust. We all know that this is a real problem that needs addressing. I would like to see firms focusing more on financial resilience and protecting the very income sources they use to obtain debts for clients rather than the debts themselves.
"But most of all, I want to see firms actively reaching out to their clients to review their protection at least annually. I would encourage firms to reach out to their client bank to address any remaining needs and fill any outstanding protection gaps. We know the mortgage market is likely to be difficult in 2024 so protection can offer the perfect antidote allowing firms to potentially do more business from fewer opportunities. A man can dream!"
Kathryn Knowles, managing director, Cura Financial Services:
"My hope for next year is that the value of underwriters comes back. There has been such a drive for automated systems and fast processes, that it's often forgotten that there are many people who cannot be accepted for insurance this way. We wouldn't be at 15 working day underwriting turnaround times if there was not a significant number of people who needed GP reports or medicals to support their applications.
"Skilled underwriters are worth their weight in gold and I can honestly say there are many of my clients who would not have the insurances they have, if there hadn't been an empathetic person sat making the decision. Some will say that empathy shouldn't come into underwriting decisions, rules are rules, but I strongly disagree.
"Over the next year I think we will be in the same situation as we are in most years. Advisers will say that insurers need to do more, insurers will say that advisers need to do more. I hope that more insurers will take Guardian's lead and change their terminal illness definition to be more supportive of terminal cancer. Terminal illness definitions are generally outdated and no longer deliver the promise that they make to the client."
Darren Jaynes, independent protection expert, Drewberry:
"In the next 12 months, I would like to see insurers constantly striving to improve all products where possible as this would benefit everyone, but also try to streamline the underwriting processes where possible - when insuring high-net-worth clients, for example, it really can be a lottery on how quickly this type of client can get coverage.
"It appears that protection awareness seems to be gathering pace, especially with the use of social media platforms. I would like to see continued awareness so protection becomes a topic of conversation or is at least thought about by everyone."
Phil Jeynes, director of corporate strategy, Reassured:
"My prediction for 2024 is that we will see larger distribution firms continue to dominate the market and corner growth. This is because smart businesses have used the pandemic and associated volatility to streamline their proposition, eradicating waste and focussing hard on data to inform their marketing and partnership strategies. Rather than hunker down and weather an unpredictable market, such firms have geared up for growth by improving their IT infrastructure, compliance oversight and commercial models.
"Smart insurers, too, have made tough decisions on distribution and will continue to focus their efforts on winning share from intermediaries demonstrating the right behaviours. Rather than thinking, as some would have us believe, that this should be dictated by advice status or operating model, intelligent insurers and reinsurers recognise that customer satisfaction, financial prudence and the strategic use of historic data to drive better decision making are the real considerations.
"The mood among insurers, especially smaller firms currently on the periphery of major distribution, is that they are ambitious and have clear plans to expand their propositions to attract new business."
