There is universal industry agreement that we must help more people get the protection cover they need. However, at a time when most consumers choose extra TV channels over life assurance, we are not even optimising what can be done in this area.
The UK life assurance industry likes to believe it makes good use of e-commerce. The truth is very different. Yes, large numbers of applications are submitted online but in how many cases was the data captured on paper then rekeyed manually? In practice, the majority of online application processes have failed to deliver sufficient benefits to persuade many advisers to give up paper data capture.
There is now some light on the horizon: Direct Life & Pensions Quote+ and iPipeline’s XRAE services offer advisers the ability to achieve a far more accurate indication of underwritten terms at the point of sale. Later this year, UnderwriteMe is expected to introduce its new comparison service enabling fully underwritten acceptance as part of the online experience. It has been a long time arriving but I am beginning to hear positive comments about their delivery capability.
It still does not address the most obvious group of consumers to help: the existing customers. One of the main drivers that has enabled the platform community to tap into the vast majority of new savings and investment business has been the ability to show all a consumer’s holdings in a single place. While addressing legacy assets has been a challenge the Regulatory Reform Act, combined with increasing pressure for a common pensions portal, looks likely to compel closed book providers and any other laggards to finally provide consumers with the information needed to be able to add in other holdings.
Too often when I have heard the benefits of providing better services to existing protection customers the response from insurers is that they cannot see the business case for improving such things. This misses the opportunity to attract incremental business by giving customers a means to easily add cover to allow for inflation or the ability to exercise existing options.
Many protection advisers I talk to are keen to see the industry put in place a way to help them conduct annual reviews with clients but the cost of getting this data manually and administrating small increases by hand is prohibitive. Increasingly they are looking at the draconian Trowbridge proposals in Australia and are anxious that if we do not achieve a more consumer friendly service protection may suffer its own version of RDR.
The absence of robust processes to provide advisers with confirmation of those life contracts they have sold that are still in force will increasingly constrain the protection market from taking advantage of many of the latest consumer facing services. From a compliance perspective it is too dangerous for an adviser to produce reports on in-force cover without an active feed from the insurer to confirm premiums are up to date.
We need a fresh approach to servicing existing protection customers. Why can we not have an industry infrastructure that makes it easy for advisers to access information on protection products from their client management systems in the same way as they can for pensions, bonds and platforms? With an increasing number of organisations beginning to make progress towards writing protection on platforms, the stand-alone protection market needs to do better.
It will take time to reinvent the way protection is perceived by the wider population. In the meantime, we could start by making it a priority to deliver better services to those consumers who have already bought into the value of protection and make it easier for advisers to help keep clients cover at the right levels. With the prospect of long overdue changes in the way we write new protection business I believe it is really important to make sure existing customers are not ignored. They need better service too.
A number of adviser and provider firms are meeting at F&TRC’s Protection Forum on 18 June to explore how to put this into practice. Any organisations interested in joining this activity can contact me at email@example.com
Ian McKenna is director of Finance & Technology Research Centre