Your IndustryFeb 4 2016

Make your watch a talking-point for protection

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Make your watch a talking-point for protection

How appealing would pay-as-you-live (PAYL) insurance be to clients and how can this help advisers to engage with their clients more frequently?

The appeal of PAYL insurance could be widespread: a small business owner, a large corporate client looking to implement a form of group private medical insurance or individuals both young and old.

Therefore there is a wide potential client base for advisers.

Historically, starting up a conversation on protection has been a “hard sell”, Tom Davis, head of research and development for Vitality, acknowledges.

He said: “Sometimes it has been a hard sell. Private medical insurance (PMI) used to be the main talking-point but PAYL insurance models have created the opportunity for advisers to have a wider, positive conversation about insurance.

“Protection is no longer just about ‘should the worst happen’ but about how products can provide various other services, and motivating clients to take advantage of the positive things they already do to improve their health and fitness.”

According to Paul Avis, marketing director for Canada Life Group Insurance, more advisers are talking to corporate clients about the benefits space, particularly as auto-enrolment and other low-cost pensions products start to erode the traditional advisory engagement with corporate clients.

Engaging a corporate client with ways to motivate and encourage employees to be healthier and happier, and monitoring this throughout the life of the group policy, is a great way for advisers to have an ongoing relationship with their corporate clients.

But PAYL-style insurance can create more touch-points for advisers in the individual market, Mr Davis adds, as no longer are policies written once and filed away, only to be reviewed when needed. By discussing the way data can be gained and collected, using a client’s smartphone or device, and fed into their insurance policies, advisers can have an ongoing conversation about protection with their individual clients.

Most advisers would be happy to make their customers aware of any advantages of new lifestyle protection solutions Neil McCarthy

Given that wearable tech offers the potential for annually decreasing premiums, advisers could have positive conversations each year with their clients about protection - not just as a ‘once off’.

Mr Davis adds: “When we launched our Active Rewards at the start of 2015, we found that people really enjoyed the short-term rewards as a powerful incentive.

“With the individual policies, where the premiums are adjusted annually depending on the previous years’ engagement, this also creates interaction.”

Neil McCarthy, sales and marketing director for LifeQuote, says that the prospect of a competitive pricing advantage could lead to “more engagement with the customer and a better persistency of a product during its term”.

Furthermore, it is not just the prospect of conversations around annual premium changes, but also the prospect of new products, which could appeal across the market.

As Mr McCarthy says: “There is an opportunity to develop a range of ‘through life’ health and protection policies that deliver better claim options throughout the life of a customer.

“If these products were available in the UK, most advisers would be happy to make their customers aware of any advantages of new lifestyle protection solutions.

“For example, if whole-of-life products with accelerated benefits as a result of failing specific activities of daily living (ADLs) could be accurately measured by simple, unobtrusive wearable technology, this could help satisfy a claim or be used during a claim period.

“If so, we could see more of this type of product being used to help long-term-care issues.”