IP: Experts at COVER's latest Think Tank debate weary of current IP format
By Lucy Quinton
Income protection (IP) will never reach its full potential should it remain in its current model format, according to industry experts at the recent COVER Think Tank.
Kevin Carr, head of protection strategy at LifeSearch, said the product was currently punching below its weight because "the sort of distribution models that most consumers come into contact with don't sell it. They may sell life insurance, but most of the time they are far too busy selling payment protection insurance (PPI) and mortgage payment protection insurance (MPPI), which are vastly inferior versions of IP."
The message was that consumers did not buy products they did not know existed.
Agreeing with Carr, Nick Kirwan, marketing director at Scottish Widows and chairman of the Association of British Insurers Protection Committee, added: "Other products - such as life cover and general insurance products - have been successfully embedded into the culture of the mortgage sale by advisers. IP just is not in that space."
He said the single biggest thing that the industry could do was to get it into that space so as to "really transform the number of sales".
Phil Hull, product manager of life, pensions and investments at Sesame, said it was important for the industry to get back to basics and that it needed to realise that people bought insurance to get themselves back into the position they were in before the event happened. "I think that IP, like a number of other contracts, does not actually deliver that at the moment, which is why it is not popular," he said.
Roger Edwards, products director at Bright Grey, argued the product should not only offer financial help. "If you amplify that point and say insurance is about getting you back into the situation that you were in before, obviously the implication is that it is always the financial circumstance you were in before. There should be a scenario we could get to where it is putting you back, not only financially, but physically back into the situation you were in before," he said.
Edwards added that the rationale for taking out IP should be because it would help consumers get back to work and help them recover and, while it was happening, it would pay the bills.
The industry experts were unanimous in their stance that it was a mixture of the regulator, the Government and the stakeholders who should take responsibility for IP as a product.
