As those of us who work in the insurance industry have long known, protection continues to be a product range that is sold and not bought.
Many people who live in the UK lack sufficient protection but it is often the last topic they would wish to think about, let alone discuss with an adviser. They need to be disturbed into taking appropriate action.
Providers and advisers need to continue to work together on how best to deliver protection products to customers - a task which isn’t easy by anyone’s standards.
The scale of the challenge is such that we may require a complete rethink around the language we use when speaking with customers, explaining their needs to them, and the way we describe the ‘protection gap’.
The protection gap in the UK is estimated to be around £3tn and, while there is an emerging direct market, many customers need to be encouraged into taking protection out via their adviser or mortgage broker at the point of remortgage or house purchase.
Such conversations are never straightforward and simplifying the language and messages which are used will benefit the client.As a nation, we are more than happy to insure our pets, holidays, weddings and mobile phones.
But, as individuals and families our lives and long-term health are often overlooked when it comes to insurance, and death or serious illness are not topics we are willing to discuss.
We as insurance providers need to make it as easy as possible for advisers to discuss life cover with clients, and so it may be the way we both describe “protection” needs to change. Currently it is an industry phrase which doesn’t properly define or attribute enough importance to what it really offers customers.
“Protection” is about protecting the future of loved ones should the worst happen, protecting an individual and their family should they become critically ill, or protecting someone’s income should they be unable to work.
It is a personal and emotive subject as it is about protecting current and future lifestyles and those of our loved ones. Such conversations are never straightforward and simplifying the language and messages which are used will benefit the client.
Housing transactions still provide the most common opportunity to discuss protection requirements with a customer, but there are other important life events which prompt a thought process to think again about insurance cover.
It is crucial opportunities such as remortgages, inheritances, births and marriages are taken to discuss protection given the inherent challenge in that many products are not annual policies which renew, but rather long-term contracts which may sit with the client unchanged and not being reviewed for years, even decades.
The annual prompt you have with home or motor insurance just isn’t there.
Both advisers and providers have a responsibility to raise the overall profile of protection products and to engage consumers in the debate about the need for appropriate levels of cover.
The desire is there to grow the protection market and one way to aid that growth could be a language change around the protection gap.
Making this term more personal, perhaps by discussing it in terms of number of customers or families who are uninsured rather than the amount of money which makes up the gap, could be a positive way forward to really engage those customers who need to be advised on protection products.
Equally the onus is on providers to fully use advances in technology to make the process simpler for customers and raise awareness of protection, with our own ‘early warning system’ helping nearly 65,000 people stay insured in the last 12 months.
The simplification of the products on offer and the literature used to promote them should also be a top priority for providers as this can only be to the benefit of the advisers when having those conversations with clients.
Transparency such as this will hopefully show customers clearly the value of the policy they are discussing or have bought, stopping them from cancelling in future and thus expand the market.
Together we need to encourage as many people as possible to make conscious decisions about protection.
Advisers will come across countless customers who shy away from the topic as it’s not something they’re keen to discuss, but every opportunity to have a conversation about protection should be capitalised upon.
By engaging the customer around the advantages of protection and changing the language we use to describe the benefits to customers and their loved ones may help to bring new business into the market and close the protection gap.
Steve Bryan is director of intermediary at Legal & General
