Unless the protection industry is determined to make radical changes this year, we are in danger of ending 2014 in a similar way as we did in 2013, looking back at a number of enhancements and changes that moved things forward slightly but did not properly tackle two of the biggest issues we face – customer apathy and lack of awareness.
Most improvements just improve the experiences of customers who would have bought protection anyway. These improvements, while of course welcome, do not do much to increase our market; they just improve certain elements and alter market shares. The focus instead must be how to properly reach out to consumers who have no desire to seek cover.
Zurich’s recent intermediary survey highlighted why consumers do not buy protection insurance. My business has long called for the Government to offer tax breaks to encourage people to self-insure, so we welcome Zurich publicly coming out with the same conclusion. We also believe the Government should stop means-testing insurance payments as this can discourage people from taking out cover, leaving them to rely on the ever changing and unpredictable benefits system.
But it is not enough for a few firms to call for Government change, all industry bodies should collectively campaign for this to give us the best chance of success.
There is also the lack of advertising. If people do not know what we sell or why they should buy it, how can they be expected to want it? A few insurers like Aviva and L&G have made efforts but we need much more.
It is not all doom and gloom as there are some current initiatives trying to make a difference. PruProtect advertises its Vitality programme through a range of mediums; an interesting approach as it publicises the lifestyle element of their proposition rather than the products themselves.
Another innovative project is the Income Protection Task Force’s Family Support Initiative. It aims to demonstrate the value of income protection by offering financial support to families who are struggling due to not having cover in place. It is a subtle approach as there will be no plugging of products or companies. Its primary focus is to improve consumer awareness by highlighting that long-term sickness happens and exposing the implications of relying on the state.
So there are some positive initiatives but it is time for all firms and organisations to take radical steps to help more people get protected. If we do, 2014 will be remembered as the year that instigated real growth in our market.
Emma Thomson is life office relationship director at Lifesearch