Protection markets are ripe for change. Paul Robertson interviews Iain Clark of LV= and suspects the company intends to be at the forefront.
“We need to develop products that allow the customer to buy a simple product and then possibly make it more complicated as their lifestyle changes. Then it is up to them if they want to do it and they can engage with an IFA after they have done that, to build upon that, if there are enough of them around.”
LV= is not all doom and gloom on this, as Clark is still noting an influx of advisers post-RDR, as some of the traditional advisers move into protection as a means of commission income.
“We are starting to see that. What has happened is a lot of people are still running under an investment environment. It is taking them a good couple of months to get themselves on a level basis with their customers about RDR, and the pleasure and the pain that comes with that. So we are expecting to see more growth on the dual basis moving forward,” he says.
A more surprising route LV= is considering is to get to consumers through the workplace. Auto-enrolment of pensions is going to mean some pension systems could piggyback protection, as they do in Australia and various other countries.
workforce engagement
Clark admits this is a consideration: “One of the things that we are going to start doing is to see how engagement flows through our own business. So we are looking at developing some products that we will engage on a worksite basis with our own workers. We are starting to test that and we will see if they would actually be open to it. We have more than 6,000 employees, so to not engage with something as big as that would be a bit silly.”
LV=’s idea is that, sometimes, the longer you are with a company, the benefits get better. But when you come in, they may be basic. So, if you want to enhance those with a few simple ideas about adding on, would they be interested? If the answer is yes from LV=’s workforce, the provider will take the proposition to large as a working proposition.
Another wheeze, that COVER is very surprised has not been done before, is engagement with the rental market, which is growing.
Traditionally, those customers do not get exposure to financial advisers. They go into an estate agent, find a house, sign a rental agreement and walk out.
“For us, it is a case of making the consumer aware at that point that it is pretty much like having a mortgage”, Clark explains. “You will be paying £700, £800, £500, £600 a month. If something happens to you…
“There are estate agents that have financial services. We have done quite a bit of work to try to push forward the need for these consumers to have some kind of exposure to the requirements of financial services.
“The platform of that one would be a simple income protection policy that covers their rental, just to make sure that if anything did happen to them, they do not have to be removed from their home.”
The overall impression is that LV= is serious about its protection business. It is actively looking for niches it can gain a foothold in and, as one of the few providers allocating advertising spend aimed at the public, is making a proper effort to grow the market.
On the basis of ‘where one leads the others follow’, we should perhaps wish them luck.
