Standards of advice key to ensuring success for the cover in the future
Raising standards of advice is one of the areas that needs to be improved if income protection (IP) is ever going to become a success, it has been revealed.
Following the Association of British Insurers (ABI) Protection Committee's first meeting on how to improve IP, it has emerged that the standard of advice given is crucial when selling the cover.
Delegates at the meeting, which included most life offices, Which?, as well as an IFA representative, identified five key areas where more work is needed to enhance the protection product.
Apart from the issue of raising standards of advice, the areas needing work include raising awareness of consumer needs, simplifying the transaction, clarifying the proposition and establishing IP in the wider context.
Commenting on the day, Nick Kirwan, chairman of the ABI Protection Committee, said: "It is important that IP is fully embedded in the protection sale, however, all the areas highlighted during the day are important."
Calling on the industry to support the ABI's efforts, Kirwan added: "The ABI Protection Committee can't do this alone. We need the industry's support."
Clive Waller, senior partner at CWC Research and co-founder of the IP Task Force, was one of the people who attended the seminar. "It was very interesting. Nick Kirwan is determined to make a difference and I have no doubt that he will," he said.
"He is keen to work with the IP Task Force and we are keen to work with the ABI. The main difference between us is that the ABI is the insurers' trade association whereas we have no limitations. This means that we include distributors as well as other stakeholders.
There is a further point that may or may not impact.
"The ABI has members who are happy with the status quo as they sell little or no IP but do sell mortgage payment protection insurance, which is clearly a competitor," Waller added.
The IP Task Force has revealed that it will be publishing its White Paper on IP on 11 December.
Peter Le Beau, the other co-founder of the group, believes it will be a significant landmark in the development of the product.
He said: "Following the recent ABI seminar on IP and the Office of Fair Trading's investigations into payment protection insurance, the time really is ripe to see if we can find a way to meet the income protection needs of this country better.
"The White Paper will be focusing on a 10-point plan to kick-start a new wave of activity around the product and we believe there is a real opportunity to address some of the problems that have prevented IP not selling better in the past," he added.
