Prudential's Paul Cowman told Forum delegates of market divergence
By Lucy Quinton
There is a clear mismatch between what customers think they are buying and what insurers are insuring, said Paul Cowman, head of proposition and market strategy, insurance, at Prudential, at this year's COVER Protection Forum.
Talking about putting customers at the heart of protection propositions, Cowman said providers needed to put themselves "into customers' shoes" to find out what their needs are. "You have to put the customer at the centre of the product development process. Talk to them, become them as well as understanding their likes and dislikes," Cowman argued.
He warned if the industry does not start listening to what people want, the protection gap will continue to widen. "Customers are only going to buy products from us if they think they are getting value for money," he said.
Focusing on the critical illness (CI) sector, Cowman argued consumers are confused about what the product really covers. "People believe the more trivial illnesses will not pay out while the important ones will. However, this is far from the truth," he said.
Cowman said consumer research Prudential had conducted showed consumers liked the concept of a product covering everything. However, he added: "The challenge is to find out how much more people are willing to pay for comprehensive cover."
In response to this research, Prudential launched a new protection product earlier this year, called the Flexible Protection Plan.
Cowman said he hoped this product will help meet consumers' needs and grow the market rather than just shifting business from one provider to another. "I want to grow the market, not compete with the existing CI market," he said.
"At the moment, 63% of consumers think insurance is a waste of money. We urgently need to do something to show the value of protection," Cowman concluded.
