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The sector must look to other industries for inspiration if it is ever to fill the protection gap, says Deepak Jobanputra, actuarial and product director for PruProtect, and the success of Apple would be a good place to start

Anyone working in the protection industry over the past 10 years will be familiar with the focus on the price of protection at the expense of missing the value of protection.

We have also seen dramatic improvements in transactional efficiency but these have been driven largely by a reaction to developments in information technology.

Such changes have had undoubted benefits for insurers and advisers but they have done little to improve consumer outcomes.

How to make protection exciting has been a topic of debate for many years but the solution has been relatively slow in coming.

It has been widely suggested that simplification is the key – but, as yet, no one has defined what this means. A term life insurance policy is about as simple as you can get, yet we still have a protection gap of £2.4trn.

Sometimes we must look outside our industry for inspiration. After all, here is where our main competition for a share of consumer spending lies.

Apple is a good example. Since the first iPod was launched 10 years ago, Apple has successfully launched the iPhone and iPad through a period of international economic turmoil.

The reason these products have been successful is not because they are cheap or reflect the rapid evolution in technology, it is because consumers did not know how they could live without them.

I do not know how my iPad works but I bought it because I understand my life is better with it than without it. We need to strive to make protection messages simpler and to make it easier for customers to see the reason for buying.

We live in progressive times and it is essential that we adapt to reflect these changes. However, to do so we may need to change our behaviour.

But behavioural change is complex. A range of factors influence why we do what we do – knowledge, awareness, knowing what changes need to be made and understanding the benefits. This may sound familiar – it is what makes protection advisers invaluable.

From 2013 onwards, it is likely the continual cutting of premiums we have seen over the past decade will come to an end, at least temporarily. If this happens, we need to make sure advisers have the right tools – namely products that are relevant to customer needs and demands.

We need to create a similar desire in consumers to the one Apple created, so they realise the risks they run without protection. To do this we need to engage them. We need to make sure our propositions enhance their daily lives and reward them for improving their health. Above all, we need to be there for them when something goes wrong, providing financial support when they need it.

As an industry we have become adept at demon-strating the value of our products when something goes wrong. Where we have been remiss is in demonstrating value when things go right. Peace of mind is an oft-used cliche but offering consumer-engaged protection that focuses on wellness can help demonstrate the true value of protection.


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