Opinion: Time to innovate income protection

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Its time to innovate and excite in the income protection space says Total Systems's Louise Cuming.

 For decades, the Financial Service industry has been pointing to the huge hole we call the ‘protection gap'. Eye-watering numbers and impressive analytics, but ultimately statistics do not move a market forward.

It doesn't matter exactly how many people are under-insured or are without any protection insurance, the point is that it is too many. The key focus should be on how we can engage with the public to help them understand the variety of protection products available and appreciate the value of the cover.

The insurance industry has developed a multitude of products to meet the wide variety of needs and budgets in the market.

These products can make a real positive difference to the lives of thousands of people and yet many of these products are woefully difficult to research and buy on-line.

While life assurance and to a lesser extent critical illness are well served for quoting and buying on-line, there has been no real innovation in the way income protection is presented to consumers over the last decade.

There is no doubt these products are more complicated. We have added layers of confusion by developing ‘long term' and ‘short term' products, some underwritten at point of sale, others based on a moratorium approach.

Layer across that the occupation definitions, the ‘excess' period , the benefit term and various premium terms (guaranteed, reviewable, guaranteed low start etc...) then even advisors get confused.

It is this very complication however, that ensures there will be a product available to suit every requirement and every budget. These, together with the value of the product for financial peace of mind, are the messages we need to get much better at communicating.

Recognising that technology will be the differentiator for income protection distribution, Best Insurance, a specialist protection broker has turned to Total Systems.

Using their Bluescape software, Total Systems has developed an approach that will radically improve the on-line experience. By embracing cutting edge technology, they have developed an income protection comparison portal that will allow customers to filter their requirements easily and get an idea of product provider choice, benefits and cost instantly.

With the new approach, they plan to lead the way by radically improving the on-line experience.

They recognise that today's customers have come to depend on the speed and convenience that the internet provides. There is no hiding from the fact that the modern generation are digital beings and in this fast moving age, the same tired ways to market just will not work.

The UK has great income protection products, so new product design is not a priority. Instead, the answer lies in improving engagement and loyalty by offering better ways for customers to understand the choices already available.

The new approach integrates on and off line fulfilment seamlessly. The team at Best Insurance have no doubt that talking to a professional will initially play a big part in the purchase of Income Protection for many.

But to really make a difference, the internet is the initial place to win hearts and minds. There has been too much focus on the ‘advice or non-advice' question. That is the wrong fight. The right fight is to improve distribution, communication and focus on what customers want.

We need more innovation and creativity in all three areas. Now is the time for a ‘game changing' proposition that will revolutionalise the way customers chose and buy income protection.

Louise Cuming is sales and marketing executive at Total Systems 

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