TechnologyMay 26 2021

More sector innovation needed post-pandemic

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Scottish Widows
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Supported by
Scottish Widows
More sector innovation needed post-pandemic
Credit: Kevin Ku via Pexels

Over the past few years, innovation in the protection sector has brought a series of new products to the market and significant changes to those already offered.

LV, for example, changed all of the upper-age limits across its protection products, including business protection, life insurance and family income benefits, to provide cover up to the age of 90. 

These simple, yet significant changes, are a reflection of increasing life expectancy and working lives which mean that many people have mortgages as they head into their 70s. 

However, the prominent trend is for cover to go beyond short-term financial security and encompass a wider range of holistic services for clients.  

Vikki Jefferies, proposition director at Primis Mortgage Network, says the best products address borrowers’ individual concerns by offering a variety of services, “providing well-rounded support to them and their families”.

She adds: “Virtual GPs and mental health support services are just a couple of examples offered by protection providers that have been pertinent to safeguarding people’s livelihoods and wellbeing, particularly during the Covid-19 crisis.” 

While access to virtual GPs has become more popular during lockdown, an overwhelming surge in demand for mental health services has seen requests soar.

Since wellbeing platform WeCare and its range of virtual support services was launched to all of Canada Life’s group income protection clients, almost two-fifths of requests from employees have been for mental health support. This makes it the most used support service on the platform. 

Access to virtual GP appointments and a personalised 'get fit' programme were the next most popular services available, making up 29 per cent and 17 per cent of requests respectively.

Data demands

Many of these innovations are helping advisers strike up the protection conversation with clients, including those that are uninsured.

Innovation in the use of digital health data in the protection sector has been prominent over recent years. Last year, Aviva introduced a free annual health check as part of its DigiCare+ service.

The test involves a blood sample taken using a finger pinprick machine, followed up by an online GP consultation. The process is designed to help policyholders better understand their health and to identify the early warning signs of some conditions.

Yet the increase in services offered, alongside more traditional protection policies themselves, can create hurdles, especially when platforms and providers are spread across different services and applications – a nuisance for both advisers and clients.

Virtual GPs and mental health support services are just a couple of examples offered by protection providers that have been pertinent to safeguarding people’s livelihoods and wellbeing, particularly during the Covid-19 crisis.--Vikki Jefferies

This spurred Protection Guru, an information hub backed by the FTRC, to develop a dedicated claims hub designed to support advisers with their client conversations and to streamline the process.

With an abundance of data collated by the platform, detailed analysis of each insurer’s claims process provides advisers with a clear and accessible way of contextualising conversations around protection.

Robert Harvey, protection product specialist at Protection Guru, says: “As the market aims for ever greater transparency on claims and claims data, advisers can find themselves inundated with reports, marketing emails and infographics, which inevitably often get lost or forgotten about.

“Our claims hub brings everything together in a single resource, including claims statistics, processes and stories. By providing advisers with detailed claims data, from the headline payout rates through to age of claimants, average payout amounts, length of claims and reasons for claim rejection, we ultimately hope to drive better protection conversations.” 

IP is one product that can be developed further to appeal to the modern-day borrower.--Vikki Jefferies

Product development

Products that can improve efficiency and make advisers’ lives easier are welcome, but the impact of the pandemic on developments within the sector presents a mixed bag of results.

On one hand, the pandemic, lockdowns, and a move away from the office has stifled innovation, as products and services tailored for pre-pandemic life found themselves outdated before coming to market.

Yet for others, the pandemic acted as a catalyst for change – and not simply for new products. Existing solutions have been used in new ways, as have the services available to both advisers and clients, often venturing into unprecedented territory.

During the Covid-19 crisis, several protection providers chose to offer the same type of payment holidays as mortgage lenders, which Primis' Jefferies says was a “really encouraging and remarkable step for the insurance industry”.

She adds: “By introducing payment and premium holidays, providers were able to help thousands of struggling borrowers relieve some of their financial burden during the pandemic while keeping their much-needed cover in place, something which has been no mean feat for the protection market.” 

Jefferies says that Covid-19 accelerated the pace of innovation in the protection market enormously. Now, though, the challenge will be to maintain this momentum, with certain sectors needing more attention than others. 

“IP is one product that can be developed further to appeal to the modern-day borrower,” she says. “Simplifying IP is one way that providers can make this product more accessible to the masses and encourage greater take-up among consumers.” 

This is where solutions such as short-term income protection can play a huge part, particularly for those families on lower incomes or that have suffered financially as a result of the pandemic. 

These types of policies allow the family or person requiring the insurance to dictate the period of cover, which is typically two years, which means there is no long-term commitment and it can be reviewed more frequently and adjusted as changes are made to lifestyles and careers. 

“The pandemic has put many people’s finances in an unexpectedly difficult position and while some have been able to save more in lockdown, many others have been faced with job losses, falls in income and hardship,” says Rich Horner, head of individual protection at MetLife.

He adds that there has been a significant increase in the number of people seeking financial advice: “This is a sensible decision as financial advice can make a big difference to how people think about their futures.

"It can help them better understand how to protect what is most important to them via valuable insurance policies. If the last year has taught us anything, it is just how unpredictable life can be.”

Mortgage protection is also in need of some post-pandemic innovation. A busy mortgage market, spurred on by the easing of restrictions, has increased the demand for protection cover and the need for robust, future-proofed training.

Jeffries says: “Improving the training available to advisers should be front of mind for providers and distributors alike. Some existing brokers may be looking for training in a specific area of the market, while the new generation of advisers may need support when it comes to kicking off protection conversations with customers.”

Already, artificial intelligence and machine learning are permeating the protection market, and it would be fair to assume that the decentralisation of work and the explosion of interconnectivity will further accelerate the change, creating opportunities and challenges for advisers for years to come.

Tom Higgins is a freelance journalist