Phil Calvert finds out how providers are using technology to help IFAs sell more protection
Protection is currently being held up as the saviour in the 1% world.
It has been estimated that IFAs will have to increase business four-fold by 2003 to maintain current income levels, and protection is being regarded as a lifeline. For less pro-active advisers this may be the case but, for most, protection should not be viewed as a 'lifeline,' but more as a 'golden opportunity.'
While health-related statistics help to convince some clients to buy protection, they are far more effective as a reminder to the industry of the potential offered by this sector of the market.
Capture the potential
If ever proof was needed for the potential of increasing earnings with protection, Friends Provident has provided an excellent example of how IFAs can earn an extra £10,000 a year in commission, simply by writing two income protection cases a month at a premium of £30 a month.
An extra £10,000 commission for writing just two cases is certainly a strong incentive to work harder at protection, but more could be done to help than just financial reward. Too often we are told what great potential the market offers, but are rarely told how to capture it.
The Solution Network recently held a seminar on The Future for Protection and demonstrated it does not want to just recruit new members, but intends to add value by helping advisers write more protection.
There was a very clear message that greater use of technology is vital over coming months and years, and exhibitors Legal & General and Friends Provident demonstrated that some providers are beginning to take big steps forward on the road towards 'proper' electronic trading in protection.
But many IFAs steer clear of protection due to the 'hassle factor'. There is a perception that the whole process of getting cases on the books is hard work and complicated, and to some extent they have a point. There are some providers who could be doing much more to prove they are easy to deal with.
Friends Provident is making great strides to re-engineer the process of writing protection business. Incorrect application forms will become a thing of the past, as it will not be possible to submit the form online unless it is filled out properly. But the company rightly stresses that a culture change is needed before the industry sees more widespread use of technology ' and that also means having the faith that it will work when it matters.
Winning business
At the moment, IFAs see the main benefits from technology as improving customer service, saving time and reducing costs, so work still needs to be done to help IFAs use technology to win more business.
Menu-based products are a good start, and sit well on an IT platform. The software demonstrates how easy it is to build a protection portfolio for clients, but best of all it shows how risk-overlap can make cover more affordable. IFAs can add and remove benefit with a click of a mouse, and one example of this is shown when adding life cover to critical illness (CI). The increase in premium is negligible at around 1%.
Permanent's Protection range from Liverpool Victoria is also worth a look. It does not receive as much attention as some of the more high-profile protection providers, but it does offer supporting technology of real value.
Adding further value
Just over half of IFAs now have a website, the majority of which are online brochures, but Liverpool Victoria makes it simple to add functionality with their e-ServIFA system. The system allows clients of IFAs with websites to access real-time quotations from Liverpool Victoria's term, CI and income protection range. The company literally gives IFAs the code so the facility can be plugged straight into their website, and customised to have the same look and feel of that site.
Visitors can then request various quotations, and having done that they either go away, telephone the IFA for further information and a full review, or proceed to the online term application form. Liverpool Victoria can give numerous examples of clients who have obtained cover via their IFA's website, and the first the IFA knew about it was when the commission was paid.
This is a good example of how the industry is actually helping IFAs to write more protection, rather than just telling them what potential the market offers.
But in the end, it is up to IFAs to be proactive and to take advantage of what is available. Providers will be only too willing to help.
Phil Calvert is proprietor of Training Strategies 2002
Email: [email protected]
