The protection gap: it is such an oft-quoted fact about our market that it has become a cliché. We speak glibly about the £2.4trn gap and the industry’s attempts to close it, but by doing so we simply reinforce the message to our customers and potential customers that it is completely normal not to have protection. We have all been guilty of this – but now it’s time to stop and to turn our thinking around 180°.
Before I offend anyone who researches or uses statistics around the ‘protection gap’ let me be clear; my issue with is not with the information itself. As a monopoly money statistic for insurers, advisers and public policy makers to jolt them into action, it perhaps has some clout; but as a means of engaging potential customers, it’s worse than useless.
Let’s face it, most people wouldn’t be able to tell you how many zeros are in a trillion. It is an impersonal, meaningless measure for something that is a deeply personal and important thing – protecting yourself and those closest to you should the worst happen.
Framing our message in this way does our industry a disservice, but it does an immense disservice to our customers too; the millions of people who have taken the appropriate steps to protect themselves and their loved ones. We need to change our approach and talk about this huge group of people instead; the ‘gang’ to join should be those who are protecting themselves and their families.
Behavioural economics (as well as an honest appreciation of my teenage self) tells me that we are all influenced by the desire to be part of a crowd, from our choice of clothes to our choice of music. There is safety in numbers, but in the case of protection, only if you are part of the right crowd.
At the moment, the ‘social norm’ that we present is to not have life insurance. If we want to reverse the recent trend of falling sales despite record low prices, we have to make the crowd who has protection the place where people want to be, rather than simply believing that it’s OK to be part of the £2.4trn statistic.
A great example of where the idea of the ‘social norm’ has changed behaviour is the use of cycle helmets. These were a rarity, even a reason for ridicule, thirty years ago. Today it is rare to see a cyclist without one.
Over time, and without large scale advertising spend, the social norm became that it is the ‘right’ thing to wear a helmet. We need to use our millions of current customers to help set the social norm that it is the ‘right’ thing to have protection.
Changing social norms doesn’t happen overnight, but we have the opportunity every time we talk about our industry to make a change for the better. It won’t cost much money. It doesn’t require new product build or marketing. We simply have to talk about the millions who participate in our industry rather than those who do not.
So, before we next don our hair shirts and indulge in some more doom-mongering, I suggest that we stop and think about the real impact of talking about the gap, and talk instead about the millions of customers who do have protection.
It will not solve all the ills of our industry and society, but perhaps, as well as making ourselves feel a little better about what we do, we can start to have a positive influence on setting the right social norm for protection.
Helen Bainbridge is protection strategy manager at Aviva