Swiss Re report concludes advisers are apathetic or not up to challenge
Advisers and providers have been urged to improve their sales technique when it comes to selling income protection (IP) by the inaugural Watch in Brief from Swiss Re.
In May, the reinsurer criticised the industry in its annual Term & Health Watch report for not doing more to invigorate IP. In this latest report, it has concluded that "either intermediaries find the challenge of overcoming consumer apathy to be beyond them, or they are just not raising the issue."
The reinsurer acknowledged some advisers may have legitimate concerns regarding the practical difficulties presented by the underwriting process. However, the report also concluded many were not bothering to explain how valuable IP could be.
To aid advisers, the reinsurer recommended that providers improve their adviser training, sales aids and technical support to demonstrate to distributors that they are serious about IP by increasing its profile within their marketing campaigns.
Andy Couchman, director at consultants Bank House Communications, said the product was going through a transition: "We probably have not got to the best product solutions and we certainly haven't got to the best marketing solutions. We will get there but it still requires more work. Something like IP will always be at the core of any working person's financial needs."
To improve sales of IP, Swiss Re said a potential solution may lie in enhancing the proposition to encourage policyholders back to work through rehabilitation; related services and improving quality of life.
The reinsurer said to improve the definition of IP, a potential solution was to define the scope of the product more accurately, especially for direct propositions that do not benefit from an intermediary explaining them.
Keith Thomson, director of investment services at Blackadders, said anything that could be done to either encourage people to return to work or at least help them maintain their lifestyles was to be applauded and was very desirable. He thought product design would become increasingly important to ensure advisers and consumers had faith in the products and the comprehensive cover that they should provide if this market was to expand further.
Watch in Brief examines issues raised in the Term & Health Watch report on an ad hoc basis and is prompted by events and developments in the market.
