Cover roundtable debates the future direction of the market
Greater innovation in the critical illness (CI) market is needed if insurers want to stay ahead of the game and increase sales figures, according to the latest Cover roundtable.
According to the roundtable, sponsored by Scottish Equitable Protect, greater simplicity and improved affordability should be top of the agenda for CI providers if the product is to continue being relevant to consumers.
Discussing the challenges facing the market, guests said the industry should take a back to basics approach to CI cover and consider the issues the product was originally designed to address.
Jill Harvey, client relationships manager at RGA Re, said: 'We are finding more problems with critical illness and we need to work through that and consider what the product was intended to do. We have created our own problems in terms of it being seen as a windfall gain. I personally do not believe that the current product meets the needs of the customer.
'There are people who suffer from illnesses that are not covered. We should be trying to offer the cover related to the level of disability ' the impact on lifestyle rather than because it fits the criteria,' she said.
However, other industry experts at the event believed tiered payouts would simply serve to further confuse consumers.
'Tiered payouts are confusing. Simplicity is important, and if the current definitions are leading too much to windfalls, then maybe it is this that needs to be looked at,' said Dale Tranter, research manager for protection and pensions at Misys IFA Services.
The impact that changing medical definitions is having on product design was also discussed at the roundtable, with many guests questioning the future of current pricing systems.
Guests agreed that as long as guaranteed rates continued to be made available, advisers and consumers would refrain from embracing reviewable CI policies. However, Peter Le Beau, managing director at Le Beau Visage, believed reviewable CI plans would not address consumer need for clarity and affordability.
'It is time the industry started taking some risk and stopped putting it back with the consumer. I think they would prefer that rather than seeing premiums go up and conditions removed,' he said.
l A full report of the roundtable will be printed in an exclusive supplement, available with the September issue of Cover.
