While there is a genuine focus on the engagement and utilisation potential for in-house and outsourced support services to complement the financial benefits of group risk, the more ‘business as usual’ aspects of the market need to be attended to and ideally improved.
The service challenge, the area where advisers see the biggest issue, is in intermediaries making profits on growth in the small and medium enterprise segment of employers.
With few group risk insurers having an end-to-end administration system, and a limited amount of quotation portals available, they struggle to justify investment in growing the market.
The continual obsession for independence, the perceived need to do whole of market reviews for smaller employers in a transactional, online world, has undermined new to market growth for insurers that do have the systems in place.
As a result the degree of market under-penetration is simply astonishing.
Furthermore, all of the market average indices were down in the latest ORC International results, showing that advisers felt less confident in UK insurers.
The disconnect between how the market was performing on GCI showed the disparity between the perception and the reality of the market – the GCI market has grown but advisers reported a 16 per cent reduction on both proposition and pricing.
Welfare reform is having a positive impact, such as reductions in death and disability benefits from the State.
These areas of policy enjoy a degree of prominence in the public discourse and provide a convenient launching point for conversations about protection benefits. These conversations are not always easy to have.
Group risk is a historically niche set of products and has, over the decades, developed an idiosyncratic suite of technical jargon which can be all but impenetrable to the uninitiated.
When your industry’s big challenge is growing the market, dizzying the people you are trying to persuade of your value is not a positive step.
We have been looking into this area recently, making no assumptions about the suitability of any of the language we use.
We chose to begin at the very beginning – what our products are called.
We know “free cover level” and “deferred period” need simplifying, but does the average person in the workplace have any idea what “Group Income Protection” means?
If not, you will have an uphill struggle to explain to them why it is a good idea to have it.
Childcare vouchers, cycle to work schemes, discounted gym memberships – the benefits of these things are self-evident and will stand out to people who can make use of them. We are not doing ourselves any favours in getting that psychological foot in the door.
To investigate this, we described two products to HR decisionmakers and asked them to pick from a list of names which they thought was the easiest to understand in relation to the descriptions given.
Those two products were GLA and GIP. There was bad news for GLA – of the half a dozen or so options given, the current name placed flat last with only 8 per cent of respondents selecting it. There was no clear-cut favourite from the alternatives unfortunately, but there was a ray of light.