Tom Baigrie: Protection success is good for us all

Tom Baigrie

Last month I noted that my business is finding consumers are engaging more with our efforts to explain income protection than they were. We have an idea as to what is causing that happy change.

To follow our logic, you must first realise that, at any one time, the number of consumers with any interest at all in buying protection products is very small. And none of those really want to. So to get people interested in even thinking about it is a real challenge.

The scale of that challenge was so clear to me that, some years ago, I tried to get the industry to join up and spend £5m or so a year on increasing consumer awareness.

While all were kind enough to take me seriously, the idea was voted down by the biggest players, who felt their smaller competitors would enjoy more benefit from increased awareness of their little-known brands relative to those the most famous.

But one of those smaller competitors went it alone. Vitality’s approach linking a rewards scheme to healthy lifestyles has created an entirely new set of profit metrics to those the rest of the industry must still use.

It has courageously allied that to a brand and awareness-spend vastly bigger than I dreamt of and, in a wonderfully contrarian stance, invested in building up the biggest tied agency and IFA account management team in the market, just when its competitors did the opposite. It has also built a very different product set.

Ask any marketer what results from having a positively thought of brand offering a well differentiated product through an energetic sales force, all supported by a successful loyalty scheme, and they will tell you it is real success through pricing power allied to rapid sales growth. The double-win.

But Vitality’s success helps the rest of us too. Thanks to its ongoing large scale media campaigns, many more consumers are engaging with the idea of health and life insurance. Many more, in fact, than go to buy a policy from Vitality.

Increased consumer awareness of messages linking protection to fitness, fame, movies and even funny dogs makes all our lives easier. And as the Vitality message is all about health, so it is that income protection is enjoying far more of the halo effect than its lowly historic sales might lead one to expect.

Then there is the Seven Families campaign, which has got more financial and mortgage advisers talking about income protection. As mentioned, consumers’ personal interest in protection is transient. But those times often coincide with when they want to talk to an adviser. And while advisers that would talk protection were getting ever rarer, consumers now have an ever improving chance of bumping into one.

In short, an improvement in supply-side behaviour is meeting an improving buy-side attitude. The combination is how a bandwagon gets rolling. Jump on it.

Tom Baigrie is chief executive of LifeSearch