The Income Protection Task Force (IPTF) is embarking on an awareness campaign to raise the profile of the protection industry which saw individual sales drop 1.2 per cent last year.
The organisation, set up in 2003 as one of the industry’s quasi-trade bodies, will hold an income protection awareness week next month, from September 20 to 24.
The week is designed to boost knowledge around “the need” for income protection, and “ultimately unite the protection industry” in propping up sales.
Roy McLoughlin, who was the IPTF’s co-chairman until January this year, told FTAdviser the initiative followed on from his work at the organisation to try and educate advisers around the product.
“If you don’t raise awareness with the advisory community, they’re not going to tell consumers about it.”
He said in recent years, when he has sat down with advisers to discuss income protection, he has often been greeted with “blank faces”.
“The awareness was quite embarrassing to be honest,” he added. “We need to convince IFAs and mortgage brokers that they need to talk about income protection before any other protection.”
He thinks a good way for advisers to navigate the conversations is to stick to two simple questions: ‘What income protection do you get from your employer?’ and ‘What do you get back from the state?’
“Generally speaking, no-one has a clue on these points,” said McLoughlin.
Income protection has long suffered on the front of consumer exposure, compared with its more popular compatriots life insurance and critical illness.
The space saw 2.16m sales in the UK last year, marking the first dip in its continued growth since 2013, according to Swiss Re data published this month.
Whilst Covid-19 threw income protection off its growth trajectory, the life insurance market has benefited hugely from the health crisis.
Canada Life data showed 5.8m UK adults have thought about or taken out a life insurance policy since the beginning of the pandemic.
This rise in interest around life insurance will only continue to hamper the income protection sector’s growth, as research by Cirencester Friendly Society published last year suggested consumers were not interested in the latter if they already had the former.
Mark Jones, Legal & General’s product director for retail protection, said the firm does not tend to split up protection into sub-branches.
“At L&G we’re focused on growing the protection market overall, offering advisers training and materials that help support their conversations with customers and we’ll be publicising the IPTF activity alongside our own initiatives.”
And whilst income protection as a whole suffered in terms of profits last year, this was not true for every provider.
Life insurance broker LifeSearch found income protection claims accounted for a third of claims between January and November 2020, an 11 percentage point increase on 2019.
But Tom Baigrie, LifeSearch’s CEO, still agreed “advisers sell [income protection] far too rarely” and “non-advisers barely at all”.
He continued: “A supply side revolution is what’s needed, with training and support for every protection adviser so that talking about income protection to clients who’ve never heard or thought of disability insurance becomes second nature.”
ruby.hinchliffe@ft.com
