Protection insurance industry figures have called for further awareness initiatives next year on the back of the Seven Families campaign’s initial success.
Set up to increase take-up of income protection, by providing a monthly income for seven families whose main breadwinner is unable to work due to illness or injury, the campaign reached its funding target in the summer and has been backed by most industry players.
Martin Reynolds, chief executive of Simplybiz Mortgages, told FTAdviser that for many years the protection industry’s sales figures have stagnated, but this year has seen a pick up in policy numbers.
“We’ve worked very hard ourselves on getting information out to our members and there seems to be a collective will in the intermediary market to make sure we get products, better pricing and more information out to the consumer on the importance of income protection.
“Seven Families is a good example of that.”
Mark Anders, Friends Life’s director of sales for individual protection, said the firm’s protection sales were up compared to 2013 and there has been increased interest in its income protection proposition after cover was extended in the summer.
The firm’s protection sales grew by 11 per cent during the year, driven by sales through advisers, partially offset by the impact of the mortgage market review, according to its latest market update.
However, Mr Anders admitted that sales of income protection have remained pretty static for a long time and that was mostly down to consumers simply not understanding the product’s importance. “The Seven Families campaign has really helped, so hopefully that’s the start of a journey with similar initiatives to raise awareness.
“We seem to face the same challenge every year, but there is still an opportunity to grow this market, propositions need to be made clearer in order to help drive consumer engagement. We’ve tried to focus on education with advisers at our roadshows, rather than just promoting products.”
Phil Jeynes, head of account development at VitalityLife, which re-branded from PruProtect in November, said that 2014 has been another year of change within the industry, although much of that has been somewhat superficial.
“Rebrands and mergers which, while sometimes exciting, are unlikely to contribute in any meaningful way to growing the market.
“More positively, we also saw the first true pan-industry effort to tackle the issue of inadequate income protection sales, through the inspired Seven Families initiative, which is already garnering great media attention and should build and build in 2015.”
He also suggested that intermediaries are stretched thinly and expected to be experts in a vast range of fields – a fact they need to prove on an ongoing and often onerous fashion to the regulator.
“To encourage the discussion on protection to take place more regularly remains key; utilising new technologies and opening up new avenues to explore should be the focus of all of us with a vested interest in plugging the clichéd gap.”
Mr Reynolds agreed, adding that some advisers have not been as confident as they should be in selling protection, which makes providers’ education drives all the more important.
“There’s got to be an honesty, if advisers aren’t going to sell it then they should create relationships with someone who will, bringing in a protection specialist or have it as a referral proposition.”
Richard Sadler, senior product development actuary at Zurich, told FTAdviser that collectively the industry is not very good at advertising the importance of protection products, adding that the firm was happy to back initiatives like Seven Families and things like Protection Awareness Week.
“Our job is to make life as easy as possible for advisers to get information and products across to consumers, so we’ve been working on training materials for Openwork and Protection Review, as well as making the online application process as quick and easy as possible.”
peter.walker@ft.com
