COVER Forum: Critical illness clients need positive messages and more choice
The protection industry has to move away from using scare stories when promoting critical illness (CI) insurance if it is to combat the recent fall in sales, argued Bright Grey products director Roger Edwards at the COVER Protection Forum.
Edwards said that telling consumers how many of them are likely to die of a critical illness is not going to help boost CI sales. Providers and intermediaries should instead start sending out a more positive message to clients. "We should tell them about survival rates rather than scaring them into buying cover," he said.
Sales of CI cover have started to fall significantly and have seen a drop of 30% over the past 12 months.
Besides reviewing sales tactics, Edwards also suggested that consumers should be given more choice when buying CI insurance. He suggested that product development could be a way of getting CI sales back on track.
"I think we should develop an impact-based critical illness product, which could look a bit like 'activities of daily living' but more generous. Or maybe we have to have a look at something completely different," said Edwards. "Perhaps we should create a new product which could be a combination of CI and income protection, instead of trying to save traditional CI."
Edwards added that the state of the housing market was another reason why the CI market was experiencing a downturn. He explained: "The slowdown in the mortgage market and fewer people buying properties, combined with the fact that bigger mortgages have forced people to buy higher cover, has affected sales."
Edwards also claimed that poor media coverage of CI insurance has had a negative impact. "The number of declined claims highlighted by programmes such as Watchdog has tarred the whole industry," he said.
As a member of the Association of British Insurers' CI working party, Edwards also commented on its recent consultation on CI definitions.
Replying to criticisms of the paper that it is working on, he said it was still "only a consultation" and that the new Statement of Best Practice would be based on the industry's response. He added: "What we are saying though is that the current definition is not sustainable, so the aim of the consultation is that we want to offer the same level of cover but make it more robust when it comes to future changes."
