What issues do you think the protection market needs to draw attention to more or aren't being discussed enough?
Phil Jeynes, PruProtect
An overwhelming majority of new business sales are term-based life cover – the product that we all know is, statistically, the least likely from the suite of products available to be claimed upon.
Don’t misunderstand me, life cover is a great product and although the chances of dying before the term ends are slim, the financial implications should it happen are devastating, so peace of mind is important.
My point is customers often use life insurance as a starting point for buying protection – because they’ve heard of it (as opposed to income protection or even critical/serious illness cover) and their parents or friends told them they should get some because of their new mortgage, child or partner, for example.
There’s nothing wrong with that, but the industry’s systems, aggregator sites, telesales operations and advice communities (generally) accept this predetermined preference and routinely fail to introduce a more relevant addition or alternative – to the extent that the Association of British Insurers (ABI) has stopped individually reporting new sales of IP in its quarterly data feeds to insurers, presumably because of the miniscule scale of this product stream.
Insurers, advisers and online solution providers must work together to reposition protection in the minds of our target audience, making it less about the necessity of life insurance (a given) and more about what else our products can offer – particularly the tangible benefits, such as discounted gym memberships and free cinema tickets, which can be used even before a claim is made.
Emma Thomson, LifeSearch
Why doesn’t the protection world treat its existing customer as well as its new customers?
Providers have made their critical illness and income protection propositions more comprehensive in the last few years, which will play a big role in helping more customers to claim – good news for protection’s image.
The recent changes in heart attack and stroke definitions, as well as the improved availability of the own-occupation definition, are very welcome. However, if it’s right to do it for new customers, why aren’t we doing it for existing clients too?
In the past we have seen Ageas, PruProtect and Aviva apply retrospective improvements that have benefited some customers, but these are exceptions. There are understandable difficulties in reinsurance treaties, pricing and systems, but they should not be insurmountable if we want to treat customers fairly.
Even if retrospectively adding changes is prohibitively expensive, there should at least be a way for customers to add the improvements to their cover, at extra cost, without having to fully re-apply. Whether providers can do this or not, intermediaries have a vital role to play and need to be better at communicating with their existing clients to ensure they are made aware of improvements to the market.
This is not just a problem for clients who have got cover in place – pipeline customers are also hit by these problems. . This needs to change if we want to be a market that truly treats all its customers fairly.
Kevin Carr, Protection Review
Communication, language and consumer trust.
We know protection isn’t exciting to buy, we know the industry lags behind in terms of technology spend, and we know the public doesn’t trust us. However, we can’t make it interesting overnight and we can’t magic up millions of pounds to spend – but we can think much more about what we say, how we say it and whom we say it to.
As the excellent Rhys Williams from Quietroom pointed out at the recent Protection Review conference, the language our industry uses is very often counter-productive. We spend too much time on the detail, we lose sight of what is important to the customer and we don’t say enough about what we do well.
As an example, the industry publishes claims statistics on a regular basis, and it took a long time to get this far, but it has worked wonders with the media and has limited negative stories about declined claims. Can we prove that publishing claims stats has improved consumer and adviser trust? Perhaps not directly, but how many declined critical illness press stories are there now compared with five to ten years ago? There is the proof.
We need ideas around what more we can do to get the message across that 95% of plans pay out, especially following various scandals in financial services.
Publishing a press release once a year is great, but if an industry or government wants to communicate an ongoing and critically important message to their core audience, they would usually do a lot more than one press release a year.
Peter Hamilton, Zurich
If you look at businesses, I think relevant cover that has been around for a few years isn’t known by people. People are missing out on the opportunities on getting tax-advantaged life cover. That’s a message for the companies themselves and for advisers that it’s part of their armoury.
The most obvious issue for consumers would be the perception that the claims records we have are very different to the reality. We probably ought to do more to help customers understand the circumstances in which we don’t pay out. As an industry, we say, ‘We’ve paid out 90% of claims, isn’t that good?’ And it is good – but the implication is that we could have paid out the other 10% but just didn’t want to do.
I think we should help customers understand we pay 100% of valid claims; that we are not looking to avoid paying claims but that there are circumstances in which the condition met doesn’t get covered under the policy and we can’t legitimately pay it in the interest of all the customers.
It’s about tackling the assumption that we’re trying to wheedle out of playing claims. Let’s highlight the strong claims message we have in the first place and make sure customers don’t think the claims that weren’t paid should have been paid out.
Let’s draw attention to why those claims aren’t being paid.
Although I think we’ve got better at submitting individual case stories and studies, we need an ongoing drip of positive stories about the differences the payments have made.
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