While mental health might have topped the agenda at the recent Protection Review conference, it was by no means the only issue up for discussion. Tony Levene rounds up some of the other key themes.
Individual, group – or both? The pros and cons of specialisation and diversification
Should advisers go for individual or group or both or somewhere in-between? That was the theme of “Two becomes One” – the final main session of the Protection Review conference.
Claire Ginnelly of intermediary Premier Choice said her big decision was whether to go for the consumer market, groups or both. She opted for both because there were savings in the synergy between the two.
She told the audience that if you only go for consumer or for group, you are only doing half the job – and allowing bigger firms to pick off good clients.
She said: “It’s amazing. Some of my associates said the group market is too complex and they would lose income, others the individual market is too complex and they would lose income. But we think two can become one. With good fact finding, and good group policies in place, we offer financial well being workshops and that opens up consumer leads. It’s not as high cost as many think.
“You may already be advising on keyman, shareholder protection and relevant life – it’s not much of a leap to discuss benefits and embedded services such as cancer workshops and mental health pathways. Yes, this is more important for smaller firms because losing just one key worker can affect everything but it works with bigger companies as well. If you start asking questions, you can help.”
She added: “There are blurred lines here. Neither market is rocket science if you are already advising. We should all talk about protection markets to raise awareness and grow. That way we can overcome the perception that the price is higher than it really is.”
Chris Morgan of AIG Life also saw convergence. He also reckoned digitising protection was the key to some market growth as “96% of employers don’t buy group protection (Swiss Re statistic) with small companies less likely to offer this.”
He said: “Group protection is a low cost way to access benefits […] It makes sense for the business as well as it being the right thing to do – and it’s good for society as a whole. It’s an opportunity for distributors but we are as bad with new business as we are good with existing plans.”
He added: “The problem is most group plan set-ups are slow, clumsy and unprofitable. But the market has improved with online quotes for SMEs the same day, while self-service portals lower costs due to less customer service. Clients can manage policies online as the phone plus digital model is gradually being rolled out – although not as fast as the individual market. This can lead to a long-term revenue stream for advisers as employers establish bigger programmes.
“We have to keep products simple with a panel of digital only insurers with suitable systems and service, plus creative and innovative digital marketing skills. Employers are trusted and group products are easy to understand. It’s inclusive but with flexibility (helped by digitising) we can tailor to individual needs. Low value individual products can work with digitising and plenty of customers. It can be a virtuous circle.
“Whether group or individual, awareness will grow but only technology makes it possible. And advisers are at the centre of this.”
Advertising or activism? Something has to change to get protection moving
“Advertising is annoying” Roger Edwards, formerly with Royal London/Bright Grey and now marketing director of Protection Review told the same organisation’s annual conference. “And even advertisers dislike some of it.”
So Ian Henderson of advertising agency AML Group was a brave person to address the meeting on “The New Advertising and why it matters”, especially as he admitted his agency gave us “See it, say it, sorted” – rated the most apoplexy-making slogan of all time (you cannot escape it on public transport).
Advertising should help people to a better, and more protected life. “That’s a big thing, but the problem is no one trusts us, and rebuilding confidence is not straightforward.”
He cited the simplicity of an old Albany Life advert.
He said: “Are you making plans for your wife’s death?” it ran. “This assumed the audience was male and married and that women did the cooking and cleaning.”
He could have added that the more recent Legal & General “value of a wife” campaign was more of the same.
He said: “We’ve had to move on due to the scandals of the past – we risk asking for long-term decisions on subjects we don’t want to talk about using the same skills as selling a chocolate bar.”
“When insurers say they pay 99% of claims, people think of the other one per cent. We are emotional rather than rational.”
He cited the Lloyds “By your side” advert as a good example of an organisation with a reputational mountain to climb.
“We have moved from top down to bottom up. Awards go to activism not adverts and so Extinction Rebellion has more power than BP. And the more big companies tell us to do things, the more we resist so we have to find ideas that inspire rather than hector.”
His conclusion was “advertising is not working”.
He said: “Protection is complicated so people put their fingers in their ears. We need to get something moving again.”
The question is what?
Could ‘Added Value’ become the industry’s central purpose?
“Could ‘Added Value’ be more important than the proposition itself?” That was the question Paul Nattrass of Medical Solutions asked the Protection Review conference.
“The healthcare time bomb – demographics, public funding, clinical advances and lifestyle plus a fall in the GP count – pushes us towards finding something better,” he said.
“The sedentary has become the new normal and 70% of NHS cases are chronic although many are avoidable while just over half all GP consultations are for long term conditions.
“The challenge for insurers is to deal with an ageing and ailing population with preventable diseases. A delay in diagnosis and lack of support may lead to health deterioration and an increase in claimant numbers plus dependency on insurance for longer periods. These are the challenges for insurers. The opportunities are obvious.”
Andrew Gething of Morgan Ash added that one size fits all no longer works and we can reduce costs with added value services. “Rehabilitation works in the group market so we need to get it into the individual market. Talking of what we can offer beyond money will improve consumer confidence and improve sales. let’s stop claims talk and move to recovery.”
It was suggested that improving “everything along the process” would lead to higher sales. The meeting heard one insurer had renamed impaired lives as “quirky lives” and that second opinion medical services can be worth more than claim proceeds.
But Lisa Jones of advisory firm LifeSearch told the conference: “Claims are more important than sales. We should always ask how I and my family would want to be treated. We need to deal with perception and we are judged by Daily Mail articles. We need to change the conversation so people feel good about claiming, rather than seeing it at best as a drudge.”
The conference also heard that the industry should aspire to “better than payout statistics”. It should focus on prevention, what the claim payout buys and how it can prevent debt.