It’s hard not to make reference to Covid-19 when I think about vulnerability.
I couldn’t have imagined writing this in 2021 while in another national lockdown. But for me, other than not being able to leave the house or see friends and loved ones, life seems relatively ‘normal’.
I’m one of the fortunate ones, and I’m immensely grateful every day, because for so many, life has completely changed. Jobs have been cut, NHS staff are under incredible strain and loved ones have been lost.
It’s also hard to ignore the UK financial divide that has been exaggerated by the pandemic.
At one end of the spectrum, the Financial Conduct Authority confirmed that 12m adults are struggling to pay their bills, and at the other end, the housing market is booming, with a 7.5 per cent price increase in 2020, the highest growth rate in six years, according to Nationwide, and mortgage approvals hitting a 13-year high.
For the millions who are financially vulnerable, I believe protection products have a vital role to play in providing support. But there are clear challenges, which I look at through two lenses – today and tomorrow.
Today, for those 12m who are facing financial hardship, we need to help them keep valuable insurance cover in place. Insurers have been doing this since the onset of the pandemic – offering things like premium holidays and valuable policy flexibility.
The pandemic has increased interest in protection as consumers have gained a new appreciation for the value of cover.But vulnerability is broader than financial, and we should also be doing what we can as an industry to support physical and mental wellbeing during this time.
Services like virtual GPs, counselling and other mental health services are providing support at a time when it’s really needed. It is also been good to see insurers offering more Covid-specific services: testing, rehabilitation and long-Covid care.
These things are not only good for customers but help to reduce strain on the NHS and our front-line workers, which is more important than ever right now.
So, onto tomorrow, what does tomorrow look like for the industry and consumers? We know that the pandemic has increased interest in protection as consumers have gained a new appreciation for the value of cover, an upward trend that I hope continues beyond the pandemic.
This is an opportunity worth seizing, but in the right way. We need to educate consumers, build trust and show that protection is there for the long haul, not just during a pandemic.
This is something that myself, Andrew Wibberley and Jo Miller are exploring as new co-chairpersons of the Income Protection Task Force (IPTF) – how to reach and engage consumers in the right way.
We also know that there are a huge number of underwriting and claims challenges ahead.
The reduction in critical illness claims today will potentially have a knock-on effect further down the line due to later diagnosis and worsening outcomes, likely impacting both life and income protection insurance claims experience.
I expect that we’ll also see mental health really coming to the fore for income protection, even more so than it is currently, and the emergence of Long Covid in income protection claims experience. Again, this will be a key area of focus for the IPTF in 2021.
Even with a fast-approaching light at the end of the tunnel, we know that 2021 will be a challenging year.
We need to continue working together to ensure the financially vulnerable stay protected, policies step in with vital health and wellbeing support and that those without cover are made aware of their options at a time when protection need awareness is up.
Katie Crook-Davies is managing director of Tabei
