Advisers are not serving the small and medium-sized enterprises well enough when it comes to group protection benefits, the head of Protect My People has claimed.
Mike Preston, business development director of the Penrith-based group protection comparison site, said there were too few UK small and medium-sized enterprises with adequate insurance for staff, and he pledged to do more in 2018 to help reach the parts of the market most advisers didn't reach.
He told FTAdviser: "More than half a million SMEs in the UK could have group life cover but only about 5 per cent of such firms actually have this benefit in place.
"We've been speaking with brokers and, to be fair, the group life market place is very poorly served by generalist brokers and, despite the introduction of new products and brands over the past five or six years, the market has not grown.
"My view is that if advisers don't recommend group life cover, then this is the kind of product that can be purchased simply and straightforwardly without advice."
Having such benefits in place means small companies can distinguish themselves against other local competitors.Mike PrestonMr Preston added: "If advisers do not want to operate in the group life market and are not engaged with insurance, they can point customers to sites such as ours to help get people engaged with protection in the first place."
Moreover, he said the 2018 deadline for auto-enrolment marked a good starting-point for advisers to start discussing benefits such as group life with their corporate clients.
Mr Preston claimed Protect My People, by being an SME itself with just 40 staff, understood the benefits of having protection in place for its employees.
He said: "Small companies are like families and if any one of the staff were to die we would want to make sure their loved ones had a financial lump sum to help take away the financial pain.
"It gives business directors the comfort of knowing we can help our staff and their families should the worst happen, and having such benefits in place means small companies can distinguish themselves against other local competitors in terms of attracting and retaining employees."
Looking further ahead into 2018, Mr Preston said there would be more brand awareness and help inform and engage SMEs about the value of death benefits, and later on in the year there may be other comparison services launched around critical illness cover.
Mr Preston had previously been a director at Legal & General-backed website AuctionMyAnnuity, which had been created after the pensions freedom and choice regime came into force in 2015, in the expectation there would be a secondary annuity market.
However, the government scrapped the secondary annuity market idea in 2016 with just months to go before the market was expected to be opened.
According to research by adviser Drewberry, only 36.7 per cent of people have some form of life insurance in place. In its 10-minute guide to group life insurance, the advisory firm claimed this was a "key employee benefit".
Andrew Jenkinson, director at Drewberry, commented: "For employees with partners or dependants that rely on their salary, a group insurance policy is a highly attractive benefit.
simoney.kyriakou@ft.com
