Last year saw group income protection (IP) provider Unum raise the stakes in the hunt for new business. The insurer took to the road with a campaign to raise awareness of the product among independent financial advisers (IFAs). And, backed by new research and product development, the initiative has already shown signs of success.
Figures show sales rose 36 per cent in the first seven months compared to the same period in 1999, with new business premiums totalling £23m. Sales through IFAs accounted for £17m, a 30 per cent increase.
Growth encouraged the insurer to plan a new administrative centre in Bristol, employing 35 staff to handle individual IP. It employs a further 450 staff in its Dorking headquarters.
The company recently produced research revealing the growth in workplace stress and a separate study showing how people underestimate the value of protecting their income.
Unum’s aim is to bring the disability insurance story to brokers who may not be familiar with it. This involved a series of seminars last summer to educate IFAs on disability risk, sales opportunities and how to position themselves in the market. The insurer may extend the programme this year.
It is hoping to encourage IFAs concerned about the threat stakeholder poses to pensions business to move into this market. Director of marketing Eugene McCormack says: “IP deserves much greater exposure. It is increasingly relevant to a society where the state is unwilling, or unable, to pick up the tab for disability and sickness.”
“We want to simplify the product and make it easier for IFAs to understand how to sell it to employers. The product is often wrapped in jargon and gobbledegook which leaves the consumer without the foggiest idea. I am disappointed we did not do more to get this message over in 2000.”
Unum’s focus on rehabilitation makes it stand out from its rivals, according to McCormack. He says: “Where possible we work with the claimant to rebuild their lives and put them back into the workplace. We are leaders in the field in working to prevent employees from being thrown onto the disability scrapheap.”
This strategy involves a force of doctors, nurses and rehabilitation counsellors working with claimants, often providing medical support beyond that available on the NHS.
However, McCormack is not certain employers appreciate these services. “Some are more aware than others. An education job needs to be done on the value of rehabilitation,” he says. He admits promotion is hard when the industry cannot even agree on a name for the product. He says: “We call it IP, permanent health insurance or long term disability insurance – the poor old consumer must be terribly confused.” Unum generally uses the US generic name “long term disability cover”, a remnant of its US heritage, although McCormack would like the industry to synchronise on IP.
But the name is not the only element of IP that Unum is trying to simplify. It also aims to help IFAs and employers by providing them with information showing company claiming patterns relative to their business sector.
And last year saw Unum offer an “enhanced review process” on its group IP policy. This guarantees key clients a review of pricing 30 days before their scheme comes up for renewal, in a bid to give companies greater control over budgets. It also committed itself to the new Raising Standards quality mark scheme launched by the Association of British Insurers in October 2000.
Richard Davey, account executive at employee benefit specialists Gissings, believes Unum has continued to develop and improve its IP offerings. He says: “Administration has become simpler, from broker-friendly accounting and personal broker representatives to client-friendly policy documentation. Its team is pro-active and clear about the business it wants to attract.”
He offers one criticism. “Sometimes, its drive for new business seems to detract from the importance of its existing contracts. However, it is becoming more and more flexible in a perpetually-squeezed market, and does endeavour to counter any rival bidding.”
Dale Tranter, the protection researcher with network Countrywide Independent Advisers, is also positive. He says: “Unum is on our approved list, I would put it in the top six among group IP providers.
“It is not necessarily the cheapest and it does not have the highest profile in the IFA market, but its products are quite good, with no serious omissions in its contracts.”