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MM leader: Price worth paying for protection push

The campaign to increase consumer engagement with protection has drawn-up its proposals and revealed the estimated costs of the initiative. It is now time for product providers and reinsurers to put their money where their mouths are.

The Consumer Protection Insurance Engagement campaign says it needs a budget of £5m from the 22 insurers and reinsurers, which have signed up to fund the work, comprising a high-profile TV, press and internet campaign.

This works out at an average of around £227,200, although there will be an element of scaling dependent on the size of the organisations.

It may be tough to persuade the management of some firms to stump up this sort of cash without any obvious short-term gain but this is something they would be foolish not to support.

Protection sales for some providers may have risen recently as IFAs concentrate on this area due to a fall in pensions and investment revenue. But consumer interest in protection is still waning and such increases could be easily reversed if markets change.

If these providers are happy to continue with the status quo of a huge protection gap, low-level sales and a lack of consumer engagement, then fine.

But the proposals drawn up by the campaign group have served up to insurers and reinsurers a means of increasing medium to long-term revenues.

A campaign focused on shocking consumers out of their current protection complacency would reap huge benefits for the industry and society. Ramming home the safety benefits that protection polices can provide individuals and families on death, disability and critical illness is a cause worth supporting.

The group’s research has concluded there is 37 per cent of the population who are either confused or disengaged policyholders. These people are more likely to lapse policies or have inappropriate cover and are the ones the campaign will focus on.

Lifesearch managing director Tom Baigrie has done a fantastic job in bringing so many businesses together to discuss the project and then fund the initial work.

These are still tough times for many firms and the sums involved are not insignificant but the long-term social and economic benefits that could be realised means it should be a price worth paying.

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