Protection sector could benefit from changing focus

Protection sector could benefit from changing focus

A focus on good health and wellbeing when selling protection policies would be a more enticing offer for insurance customers than the product itself, protection experts have said. 

RedArc nurses, which provides practical and emotional support to scheme members, has urged the industry to prioritise the day-to-day services of a protection policy in its marketing to reach more consumers.

The firm believes engaging people with add-ons would in turn reduce the need for many future claims.

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Value added services have been a growing part of protection policies in recent years and most plans now offer a range of add-ons, from nurses, counselling and second medical opinions to smart watches and free coffee.

Christine Husbands, managing director of RedArc Nurses, said: “When a financial payout is the expectation of the product, we’re already starting from the point of worst-case scenario, and for the many who don’t need to make a financial claim, the insurance can be seen as poor value, expensive or pointless.

“Customers are likely to be much more engaged with a product that is a set of useful, day-to-day, health-related services aimed at keeping them well and dealing quickly with issues — such as ill health, bereavement, trauma — with the financial payout being there should the worst happen. 

“Focusing on positives seems a much more attractive use of money.”

Ms Husbands also thought this strategy would create better engagement between the consumer and the provider as currently most clients will not be in contact with their insurer at all after setting up the policy.

Alan Knowles, managing director at Cura Financial Services, agreed.

He said: “Ms Husbands hits the nail on the head. Most protection insurance policies simply gather dust until they are cancelled, expire or sadly when a claim is needed."

But he added: “Whilst I don’t think that the value-added service should become the core product — with insurance as the bolt-on — I do feel that the two should be more symbiotic.”

RedArc said its research has shown add-on services improved the user’s view of their insurer, with 93 per cent of customers who accessed RedArc through their policy ending up with an enhanced view of their provider.

Ms Husbands said: “Major improvements can be made to the health and wellbeing of policyholders and their families, and many claims could be avoided, a real ‘win-win’.

"We’re already starting to see this evolve, and insurers who don’t alter their approach risk being left behind.”

Mr Knowles said he had personally used the video GP services provided with his life insurance over the past few months, adding that he had “never placed so much value” on his own cover since.

He added: “Preventing a claim not only saves everyone money, it also adds real value for the customer.”

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