To add value, or not to add value; that is the question.
We all like the idea of getting more for our money – and in the protection sector, added value benefits such as GP services, second opinions, rehab and counselling afford this opportunity.
For clients, they add something tangible to something that is otherwise very intangible (unless you’re making a claim of course). For the insurer, they help with long-term risk mitigation, cost control and retention.
On a societal level, they speak to the government’s preventative healthcare agenda too. It all sounds spot on.
But are advisers talking about them enough and are policyholders using them enough?
Take the group risk industry for example. Nearly 13m employees in the UK have some form of financial protection in the shape of life, critical illness (CI) or income protection (IP).
And, in total last year, there were 75,4662 interactions with the additional help and support services that were all funded by group risk insurers.
This is great but it only represents 0.6 per cent of that insured population.
Overall usage statistics for the individual protection sector are generally not available but anecdotal evidence suggests a similar picture.
When talking to advisers what is interesting with these care and support services is whether their provision is seen as being proactive or passive – that is, are policyholders and claimants actively encouraged and channelled to the services – or only if they know to ask for them?
The higher the take up, presumably the higher the cost to insurers.
But could that cost be more than cancelled out by the long-term impact in terms of client retention, reduced claims, positive case studies and endorsement?
The theoretical aspect is great.
But, in practice, evidence suggests that the sheer volume of different added value benefits available coupled with the lack of consistent practice among insurers (obviously, for reasons of competitiveness) can make it difficult for advisers to factor these aspects into their advice process in any considered and consistent way.
Consequently, their availability is not front of the client’s mind when they need an urgent GP appointment, when they want a health check, a financial check, or even when they are looking to get their will written.
Does this represent a missed opportunity for all parties involved?
For advisers, especially those who do not write protection business every day, keeping up with which insurer offers which service is not easy.
Essentially it falls down to the adviser to ensure they are up to date. But could insurers do more?
“While responsibility for staying up to date rests with the adviser, one could argue that responsibility means different things to different people.
“For instance, sometimes insurers focus on a limited number of advisers, which is understandable, but also means other advisers may be less aware,” says Roy McLoughlin, of Cavendish Ware.