At a recent conference titled ’10 years is a long time in protection’, the Protection Review brought 200 people together to analyse the protection market’s recent history, and debate its future.
While it was recognised that what we do has a fantastic impact on many people’s lives when they need it most, what came through loud and clear is that we must develop a culture of serving the customer much better than we do now.
There is little in life as transformative as receiving a payment from an income protection, life or critical illness policy, as it inevitably follows a major change in life circumstances. But providers and advisers cannot rest on their laurels when so many remain under protected and have little knowledge of - or faith in - our industry. When it comes to building trust it seems that everyone thinks it is somebody else’s job.
This is highlighted in research carried out by the Protection Review and iPipeline, which canvassed the views of around 100 consumers about their understanding of protection insurance. It showed that a
Among those that had cover, not a single person knew the exact details of what they had in place - and of course many had no cover at all. This made them feel concerned and “a bit rubbish”, especially when they thought about their children.
A number of people said that when it comes to protection they feel like they need to be persuaded to buy cover, which shows the importance of advice in this market.
Here we look at some of the findings from the research in more detail, and how this could help advisers when talking to clients about protection.
Keeping our promises
I’ve heard people in the industry say before that we are not in the market of selling insurance, we are in the market of selling a promise to customers: a promise that if a certain event happens, we will look after them or their loved ones financially.
As an industry we are very good at keeping those promises, but unfortunately this is contrary to popular belief. Recent high-profile cases of claims being rejected, which gain public support from the likes of Stephen Fry’s twitter campaign, give the public the impression that these very few cases are the norm and providers will wriggle out of paying a claim at any cost.
So when the researchers asked people the percentage of claims they think protection insurers pay out each year the average answer was just 38 per cent, with the lowest answer a mere 5 per cent. This is staggeringly disappointing when the real answer is just over 90 per cent.
