Last year, Guardian Financial Services entered the insurance market in a bid to "disturb the market" and provide advisers with a transparent and simpler alternative for their clients.
The challenger pledged to make its terms and conditions on insurance policies consumer friendly by removing medical jargon and promising a pay-out on a doctor’s word, rather than a medical technicality.
But the industry as a whole is still lagging behind and consumers still don't trust protection providers, the firm's chief operating officer has warned.
Katya MacLean said: "Issues surrounding trust and transparency are still a real problem in the industry.
"When you buy protection in the market, the description of which medical conditions are covered is in such medical jargon it’s almost impossible for the average consumer to understand.
"We wanted to simplify the whole process to make it more transparent and try to build trust within the industry again. So with Guardian, if your doctor says you have a heart attack, we pay out."
The provider also aimed to improve the adviser-client relationship to try and help advisers offer insurance products to their clients.
Ms MacLean said she thought the firm had been successful in this and said the fact it had been added to most adviser panels showed there was a keen interest surrounding the products.
One year on, Guardian Financial Services sits on eight panels, has 10 business partnerships and access to more than 75 per cent of the protection market.
Guardian’s products are available to about 14,000 advisers through its position with Paradigm, Tenet, Simply Protect, Primis, SJP, Openwork and Home Loan Partnership, while its business partnerships give access to another 5,000 intermediaries.
Guardian offers advisers and their clients what it calls ‘reserved cover’.
This means that when a client takes out a mortgage, Guardian can offer them an insurance policy based on their underwriting at that time.
But, if the client does not wish to pursue the insurance, the offer remains at the original price and with the original underwriting for 27 months meaning the adviser can re-open the question of insurance two years later.
Ms MacLean said a key aim of Guardian’s was to ensure it looked after its existing customers as well as, or better than, its new customers.
She said: "Often in the critical illness market, new customers get better deals as more conditions become readily covered in the industry. At Guardian, we give our existing customer whatever the ‘best deal’ is. For instance, if we improved our policy, we would offer our existing customers the same as our new.
"If our newer policy had slightly worse conditions, our existing customers would remain on their original policy."
Last October, Guardian paid out its first claim to a customer, who had injured himself during a sporting activity.
The pay-out was £6,000 – the highest available with this type of additional cover — and the customer was called back within 30 minutes of their original inquiry to confirm the claim would be paid and the payment was in the customer's bank account by the end of that working week.
Looking forward, Ms MacLean said the focus for 2019 was to ensure the company could live up to its promises and provide protection to its customers.
"We need to make sure we can give customers the service we have promised. But clearly, we're a business with big ambitions and we do expect to move across the rest of the protection products and market," she said.
Commenting on Guardian’s journey, Alan Lakey, director at HighClere Financial, said: "Guardian’s launch provided a real challenge for competing insurers. Instead of the usual process of tinkering with the template, they started from scratch with a critical illness plan and life plan which leads the market in terms of quality.
"The downside, as always, is that quality comes at a price. The Guardian offer is more expensive than rival plans which means that the 'pile it high sell it cheap' advisers will continue to focus on premium led plans whilst the quality end and value led advisers will give it serious consideration.
"Thus far no other insurer has attempted to copy them although we are sure to find others edging closer to their design in due course. Quality plans should be successful and I certainly hope that Guardian is able to obtain a suitable market share."
imogen.tew@ft.com
