What the protection industry experts would like to see in 2019
2018 was a year that saw massive changes in the protection industry. Guardian shook up the life and critical illness market, all but a few insurers broadening their critical illness coverage and a breakthrough in how income protection and life benefits used to repay mortgages are treated with regard to universal credit are just a few highlights.
The new year brings with it the promise of more seismic changes. We asked a number of leading protection specialists, if they had a new year’s wish what would they like to see happen in 2019? The wishes varied greatly, so let’s see what some of the industry’s best brains are hoping for in 2019.
Alan Knowles – Managing Director of Cura
In 2019 I hope to see more insurers break away from the ‘computer says no’ mentality, to challenge existing mindsets of how much risk many health conditions actually pose. I’m not advocating for every person to be considered at standard rates, or to have immediate online decisions, for many that simply isn’t possible. But, individual considerations and an empathetic ear, will go along way in building confidence in the insurance industry’s efforts to improve access to insurance. I also hope that we continue to see the strive towards better customer outcomes at claims stage through even more insurers signing up to the PDGs Claims Charter and Funeral Pledge.
Brian Lentz - Freelance contractor protection expert and product architect
Industry protection innovation through Gamification may soon attract different and "hard to reach" generations, which would be very welcome. Also, greater takeup of Income Replacement in 2019 is vital, as is innovation to cater for protection needs from a young age all the way through to older life needs. Multi-cover/multi-benefits and morphing cover for different claims needs would be a sensible answer if it extends fully into later life expectancy whilst being affordable. It also needs to address changing employment types and periods along with loss of a job.
Regulatory understanding of the elemental and vital role protection provides in the face of an increasing complex whilst ill served state benefits system that cannot support families, mortgage payers and renters would be welcomed after thirty years of regulation missing this foundation of financial planning. What is the point of a regulator insisting on stress testing for an interest rate change whilst ignoring the often life changing impact of death or impairment of a partner or oneself on the family and mortgage...and when will the regulator realise face to face customers are likely to understand more than being advised from a distance and align the ability to go on cover immediately and follow up with the SL to prevent death or an uncovered claim whilst sorting paperwork, as happens under the distance marketing directive. Perhaps Brexit will bring the ability to think our regulation through, like ditching the Test Achats ruling and pricing for gender risk again.
Government needs to now consider requiring an ill health benefits statement with the new pensions dashboard including the state benefits calculator links, otherwise what's the point of preparing for income in future later years if today and tomorrow's income is lost?
Dave Edwards – Director of Esperto Business Solutions
The protection market has seen something of a resurgence over 2018 and long may this continue going into 2019.
Technology innovation is playing a key role in this success story, but more can still be done by providers and technology suppliers to improve the process. The use of Artificial Intelligence (AI) can further speed up the know your client and application process. Further innovation and greater adoption by advisers, providers and customers could also see tools ‘nudging’ products based on the known and propensity for conditions without the need for early adviser intervention.
Further collaboration between intermediary businesses, product providers and technology suppliers will only help to further speed up and enhance the protection experience for the consumer. Working together on new initiatives and campaigns to influence the consumer and the regulator of how the protection advice underpins the populations financial security and prosperity.
Ian Sawyer – Managing Director at Assured Futures Ltd
My wish for 2019 would be for insurers providing individual policies to throw away individual Trust forms and apply the 'Master Trust' format, prevalent in the group life market, allowing all policyholders to automatically have their policy placed in trust and make and 'expression of wish' via their application form. Simpler for advisers, insurers and more importantly our consumers, who remain at best perplexed by the forms, and worse usually unprotected by a trust facility.
Kevin Carr – Protection Review CEO
What I’d like to see is a greater focus on simplicity, especially around renters, income protection and family income benefit. I also think there’s a place for a fixed price, simple IP product for students and millennials, aimed at parents, which includes a small amount of short-term IP and no underwriting (but a pre-existing condition exclusion) and includes a few relevant discounts or freebies to make it tangible. I suspect we’ll also see some developments around mortgage related IP and of course a continued raft of CI changes.
Michael Aldridge – Innovation Director at London & Country Mortgages
Personally, I’d like to see further advances made in the field of predictive underwriting. Using alternative sources of data to underwrite customers much more efficiently, in turn speeding up what is otherwise a slow and arduous process. Royal London pioneered this approach when they introduced the concept of streamlined underwriting alongside L&C in 2017, using mortgage fact-find data, predictive analytics and machine learning to replace 30-40 questions with a maximum of 6. It’s been a revelation for on boarding protection clients and is night and day versus the alternative (old) route. It offers guaranteed terms at the end of a very short question set versus a speculative quote and the end of a lengthy question set – what’s not to like. I’d welcome more providers introducing similar processes across many more product lines and outside the mortgage protection market too.
Mike Allison – Head of Protection at Paradigm Mortgage Services & Paradigm Protect
My wishes for 2019 would be even further streamlined applications especially when linked to Mortgages- I reiterate my stance that clients of a certain age should be able to take out life cover with very few questions indeed - people don’t buy houses to defraud Life companies!!
Continued education to brokers about the opportunities for Life sales will of course be important and ongoing support from Distributors and Providers alike will help
In short- anything that encourages clients to take out cover and Brokers to focus on opportunities will be welcomed whether that be Price, Process, Product or Promotion- making life easier for Brokers is a timeless route to success
Neil McCarthy – Chief Commercial Officer at Direct Life & Pensions Services Ltd
If we all think about “WHY” income protection, critical illness and life insurance can be so valuable then we will get some innovative, passionately delivered solutions reaching more customers with products they understand and want.
And these solutions, in 2019 could include;
more innovative ways to engage the customer, both through intermediated and direct channels, using modern technology that current consumers can engage with, more targeted product solutions that consumers find attractive, linked directly to other financial products eg mortgages, investments – or possibly intergenerational purchasing, simpler ways of buying and selling the product, with improved messaging, that take away the complexity, add to the certainty claims payment, making it easier for a distributor to sell, and a consumer to buy, more relevance to long term solutions as a customers’ risk profile and circumstances change, more focus on “living benefits” eg IP and CI rather than Term Life.
What we don’t need is slimmed down cheaper term products, more underwriting, increasing complexity of product features confusing the core message.
Robert Harvey – Head of Protection Advice at Drewberry Insurance
In 2019 I’d love to see some radical changes to Income Protection Insurance and some genuine market disruption in a similar way to some of the work going into Critical Illness Insurance. At a fairly basic level I’d like to see more insurers offering financial underwriting at inception, to lock in either the full or partial benefit, and reduce the risk of future over-insurance; the inclusion of carer benefits for those who have to stop working to care for sick children; and more open and fairer underwriting, particularly around mental illness.
Thinking a little more imaginatively and recognising the impact early intervention and accessing the right treatment quickly can have on an individual’s health, a sort of hybrid cover of Income Protection and Private Medical Insurance would be on my wish-list. Effectively this would be insurers funding access to services such as private consultations and diagnostics, or an enhancement to some of the current free counselling and therapy benefits offered by a number of insurers.
Providers could look to offer Income Protection coverage beyond state retirement age as well, in view of the increasing number of years individuals spend post-retirement in poor health and with longer-term care needs. Clearly this wouldn’t be a continuation of income-based cover, but instead could be some form of pre-retirement funded monthly care cover, or a pre-funded extension of income benefits beyond the retirement age of the plan.
Roy McLoughlin – Associate Director Cavendish Ware
My wish list starts with a simple one. The government must stop the ridiculous situation whereby death in service schemes are becoming taxed due to people’s pension pots taking multiples over the million pound figure.
Secondly early intervention in IP claims before deferral periods.
And last but not least can the income protection industry please change the medieval rules on self-employed variable earnings and LTD companies who have dividends accumulated in their accounts. A more pragmatic attitude and approach is needed please!
Tom Bagrie - CEO of LifeSearch and a founder member of the PDG
Imagine a market where those wanting to help their customers with more complex issues get protected send them to specialists. Just like doctors or solicitors do. Our next step towards professionalism is achievable in 2019 if insurers demand those they give agencies to don’t just try to make some money, but are a credit to our market, and then use their reach to spread the word that ‘signposting’ is the way forward.
Oh, and LifeSearch and all other members of the Protection Distributors Group dream of a day when we suggest a customer seeking Life Insurance also considers their need for Income Protection and the customer answers, “Oh yes I’ve heard about that and why I might need it, tell me more.” I wish the whole industry would promote IP.
Adam Higgs – Head of Protection at FTRC
Clearly, I couldn’t end without throwing my own New Year wish into the hat! There is not one comment above that I disagree with and indeed I have had to re-write my comment several times after receiving these. My wish would be for insurers to become more engaged with the core software that advisers use in terms of practice management software. If insurers could build integrations for in force policy information with such systems, advisers would find it far easier to produce annual statements and review documents and dare I say it even include protection within their client portal offering with more confidence. For wealth advisers this could mean that protection could become far more visible with their clients. Building on this, if insurers could work together with advisers and software suppliers to build a standard for in force policy messages, the industry could start focusing on ongoing protection advice with more innovation from tech companies in this area.
We will revisit this wishes at the end of the year to see how many have come true but for the time being, we wish all of our readers a very happy and prosperous new year.
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