Protection  

Signposting to protection advisers to become the norm

Signposting to protection advisers to become the norm

The year 2020 will see 'signposting' become cemented into the protection industry, the chairman of the Protection Distributor's Group has said.

Alan Knowles, who is also managing director at Cura Financial Services, told FTAdviser the Access to Insurance Working Party had "worked tirelessly" throughout 2019 to promote signposting and that 2020 was the year it would "cement" into the protection market.

Signposting is when consumers looking for protection but struggling to find appropriate cover are directed to providers or advisers who can help them, rather than left without insurance.

Mr Knowles said: "Don't tell someone they are uninsurable or to avoid protection because they have been declined.

"Instead, if you can't offer cover, either find somebody who specialises in placing more difficult risks or signpost to an independent service that can help them."

Improvements to access to insurance has helped encourage signposting throughout 2019, according to Mr Knowles.

The protection market has shaken up life insurance rates for those living with HIV to ensure the price is realistic and the first underwritten income protection was also available for those who are HIV positive in 2019.

There have also been steps taken in the underwriting of mental health.

Royal London allowed life insurance to be written with a full-term suicide and self-harm exclusion — rather than the standard 12 months — which offered more affordable premiums for people with more serious mental health events in their recent medical history.

On top of this some providers announced they would start to underwrite some milder mental health disclosures more favourably, rather than the standard route of simply adding on exclusions.

Others chose to refer cases to underwriting rather than declining them, which had opened the door for them to insure more people, according to Mr Knowles.

Although Mr Knowles thought making sure consumers were directed to others in the protection market was an important part of signposting, he added that a wider signpost to protection in general was needed.

He said: "None of us should walk past protection because we are too busy, or because it's not really our bag.

"Under the Insurance Distribution Directive and the Senior Managers & Certification Regime, the regulator is putting more onus on advisers to do right by their clients. Simply walking past protection is not doing the best by our clients."

While protection can underpin most financial plans it has been a taboo topic in many adviser offices.

Earlier this year advisers were urged to talk about protection with their clients when figures showed only about 4 per cent of advisers who could write protection were doing so on a daily basis.

The PDG, formed in 2016, plans to improve the insurance market for consumers as a ‘force of good for protection’ and has since driven market-wide changes to the industry.

These included the PDG Claims Charter — which stated a dedicated claims team should be made available for the claims process and that no potential claimant could be turned away by anyone not on the claims team — and the Funeral Payment Pledge, where providers will pay £10,000 upfront on all valid life insurance claims without waiting for probate to fund a funeral.