Protection products are gaining popularity, but pose data concerns

Ian McKenna

Ian McKenna

Over the past couple of years, technology has enabled a radical evolution of the benefits life insurance products deliver to consumers. 

Historically, insurance was something people hoped they would never need to use, as invariably this meant some form of catastrophe had happened.  

But modern protection products offer far more and provide a range of features that can benefit consumers on a day-to-day basis. 

The pandemic has highlighted the benefits of many of these features as the NHS is under unparalleled pressure. 

Features like remote GP services, mental health support, and even annual health checks using finger-prick blood tests give access to primary medical care more quickly and conveniently than it is available from the NHS, while their resources are under considerable strain.  

Having a range of such services, available typically via mobile apps, enables far more regular interaction with insurers and can re-enforce the value customers receive from their plans. 

Previously, insurers would contact life insurance customers at most once a year with an annual statement, and many did not even do that.

This means that comparison of products on the basis of price alone is no longer a valid differentiation. Indeed, since the Financial Conduct Authority modified their rules in November 2018 to align with the Insurance Distribution Directive, both advised and non-advised sales are required to include an assessment of suitability based on more than just price. 

It was Vitality who really got the ball rolling in this area, and still to this day offers far more than just about any insurer by way of added-value services, with its comprehensive health and fitness proposition that can provide discounted food, free coffee and even an Apple Watch to customers who exercise regularly.  

Most other insurers have included some added-value services but to date, at least in the UK, no insurer has matched them on health benefits. 

Elsewhere in the world, however, this is starting to happen, and I expect more insurers to take this course going forward. I believe it is a matter of when, rather than if. 

Data risks

While overall these products are making life insurance far more suitable for the needs of modern consumers, we do need to be careful that in deploying services promptly we are not putting customers at risk. 

In this context I have concerns about many virtual GP services. Many contain a serious flaw that exposes users to considerable risks of loss of confidential personal data. 

Rightly, the services usually give the user the ability to notify their NHS GP of the discussion with a virtual GP.  But, in most cases I have seen, this sensitive medical data is sent as an unencrypted email.