Just because an insurance product is meeting more than 90 per cent of claims, it does not mean that there is no or little room left for improvement. Or that the advice process and the information flow from the insurance companies is as good as it should be. Far from it.
But that is where we are with financial protection insurance. For all the good work of the Protection Review, and the marvellous analysis of CIExpert (Alan Lakey), the industry is stuck in the mud, refusing to adapt to the modern world that we live in.
It is more luddite than modern. More regressive than progressive. Refusing to change old practices that ostracise and penalise long-standing customers.
Indeed, it is as insular an industry as I have ever come across in financial services. But criticise it at your peril because to do so results in a flurry of handbag waving from the bombastic Association of British Insurers (ABI) which along the way seems to have rubbed out the consumer from its remit (bring back Otto Thoresen, the only enlightened director general in living memory).
Criticism also inevitably sparks a backlash from those who make their living from insuring, reinsuring or promoting protection cover. For example, the last article I wrote on critical illness insurance for Financial Adviser a month ago sparked a wonderful online response from ‘Jerry’.
Unhappy that I had attacked the ABI for contemplating reduced payouts for new critical illness policyholders with stage one cancer, Mr Jerry (a keen fisherman, I am reliably told, when he is not working for a key reinsurer) got himself terribly worked up (I trust he has protection insurance because he will be claiming on it if he carries on getting so agitated).
"Another piece of scaremongering by no friend of the industry Prestridge," he wrote. "Have you [me] spoken to anyone who really knows what the issues are here or has attended the meetings? [question mark added by me]. Or are you relying on Messrs Carr [Kevin Carr of Protection Review] et al who have no technical understanding of how to put a product together, price it and keep it sustainable?" [question mark added by me].
There is plenty more of Jerry – do have a read at https://www.ftadviser.com/opinion/2017/07/12/wolves-at-the-family-doors/. And, for the record, Jerry, I did speak to someone who knew about the issues – a key protection insurance adviser who had been asked to comment on possible changes to the ABI’s statement of best practice for critical illness cover. Mr Carr was not involved.
Someone else also took exception to my critical illness article, but it appears the venting of their spleen was too much for Financial Adviser’s team of online moderators. Their comments are still under review – nearly a month since making them. Is this Jerry again?
For all of Jerry’s comments, and all the moaning and groaning from the ABI, the fact remains that the financial protection insurance industry needs to take a closer look at itself and ask a key question. "Could we be doing things better?" The answer is a resounding "yes".