Advice expert Angela Davidson explores how the dawn of Covid-19 is impacting conversations with clients
Thinking back to the ‘kick off' seminars earlier in the year that many of us attended, it is hard to believe that unheard of phrases like ‘social distancing' and ‘furloughing' would be as prevalent as they are today. Whilst coronavirus has undoubtedly turned our whole world upside down, it is its effects and impact on the protection industry that I wish to discuss today.
How have these unprecedented times changed the protection landscape?
Market trends fascinate me, because ultimately, they reflect changes in human behaviour. The huge uplift in life cover enquiries, seen earlier in the year, was on a global scale. Europe, India, Australia, USA all reported the same emerging patterns. Not so surprising, there has always been a correlation between an increase in the demand for life insurance and hard times; when we are unsettled, we seek reassurance.
Nobody wants to see clients cancel important cover down the line, for lack of understanding its full value.
But while this notable increase in enquiries was happening, we were going into lockdown. Thankfully, the financial service sector was in a better position than many other industries to carry on working. When push came to shove, it was incredible how quickly advisers, providers and networks (with a little help from technology) found that working from home was quite doable, if not without its challenges. Our somewhat ‘sociable' industry of face to face meetings, seminars, handshakes, and high fives, needed to change, and change we did.
Providers too, hit by disruption to their underwriting processes, stepped up swiftly to implement their contingency plans to keep business flowing.
How has it impacted consumers?
Advisers often recall instances when they would get a call out of the blue from a client, who previously had point-blank refused to take any form of protection, now eager to put a plan in place. The advisers would subsequently find out that the clients had had a health scare or tragic event occur to someone dear to them that sparked the enquiry. As is often the case, it took a major shock to bring the importance of protection home. Likewise, the spike in protection enquiries, seen across the globe, arose from such a shock, one that nobody could have predicted.
Naturally, everyone is fearful, the increased online search traffic for life insurance is testimony to that. There is nothing quite like a deadly virus wreaking havoc across the globe to focus the mind on our own mortality. Additionally, there was a large increase in enquiries regarding income protection too, because people started to worry more about what would happen if they were too ill to work. All valid concerns that spurred the masses to seek out insurance.
How does the theory 'insurance must be sold, not bought' work in this new world?
Advisers know, clients seldom come hammering down the door for advice on protection when things are going well. When there is no visible threat, out of sight is out of mind. However, in these days' of 24/7 news, shocking scenes from across the world, daily infection and death rates at our fingertips, Covid-19 certainly changed all that.
If consumers are actively looking for protection, have the common objections to buying protection just gone away? In a word, no, but I believe the pandemic has taken the edge off, for now. Barriers such as "it's too expensive", "it'll never happen to me" and "I've never had a day off in my life'' seem to have been quelled, for now.
The danger is that if a policy is ‘sold' on the back of a client's fear of Covid-19 alone, ultimately, when the fear of the virus diminishes over time, so will their perceived need for cover. Yes, acknowledgement must be made that we are all at risk from this new threat, but let's not make it the mainstay of protection conversations, that would be selling protection short and an injustice to the client.
Nobody wants to see clients cancel important cover down the line, for lack of understanding its full value. Thorough, two-way conversations, about protection have always been incredibly important, and never more so than now. Taking the time to talk through scenarios, asking those thought-provoking questions, discussing the benefits and quality of cover, all serve to build lasting relationships and confidence in protection - the way it should be.
How do we look after people who might be struggling?
Covid-19 has provided us with a juxtaposition. There are those who, perhaps for the first time, have a clear understanding of their need for protection, coupled with the fear of losing their livelihoods. Perhaps the best way to help these clients would be to put a small, affordable, amount of cover in place with the flexibility to increase as their circumstances improve. Better to have a little bit of something than a whole lot of nothing.
This is a vital time to stay close to existing clients too, many of whom may be having difficulty paying premiums, because they are furloughed or have lost their jobs. Thankfully, the providers response to this crisis has been tremendous, many allowing payment holidays or reduction in sums assured to help clients keep their cover in place at this crucial time.
Lockdown has been hard on everyone, no more than on those who have lost loved ones. Many are struggling with isolation and a massive change to their lifestyles, no wonder mental health is so prominent in the news. Making clients, new and old, aware of the added value services they can tap into, such as counselling, is imperative. This could be just the lifeline they need right now.
Where do we go from here?
We no doubt have difficult times ahead in all areas of our lives. But, as an industry, I am sure we will rise to whatever challenges we face.
Angela Davidson is founder of Passion For Protection
Available to wider adviser community in early 2021
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