This current investigation presents both challenge and opportunity to those within the income protection industry – challenge in how to avoid being tarnished with the same brush and opportunity given that some 14 million policyholders should be encouraged to review any financial protection they have in place.
First, to distance ourselves from PPI and the inevitable fallout, we must promote the positives within our industry. Income protection has had its fair share of criticism over the years, some justified, some not, but it cannot be argued that for the majority of consumers, it provides a more comprehensive and better value proposition.
Intermediaries and providers have a responsibility to publicise the benefits of income protection. In my mind, the comprehensive and long-term nature of income protection far outweighs the unemployment benefits offered on some PPI plans, giving consumers the best possible chance to protect their long-term financial security. However, if there is one thing that can be learnt from the PPI industry, it is the power of distribution and awareness. If we can maximise these factors, the future looks bright.
Opening dialogue with consumers is vital. Years of negative press surrounding the protection industry has left a scar in consumers’ minds. Income protection providers are in a good position to remedy this. We have a good history and a good story to tell on claims, so why not share it?
One of the foundations of our philosophy at Pioneer is an open approach on this front. We are committed to publishing our claims’ statistics annually to reassure consumers that when it comes to the acid test of an income protection policy, we deliver.
The second important question is how do we as an industry take advantage of some 14 million under-protected and overcharged PPI policyholders? The answer has to be a joint effort between providers and intermediaries.
Providers must offer support, training and first-class service levels and invest in ongoing initiatives such as teleunderwriting to make the application process as efficient as possible, ensuring that consumers get the policy which most suits their needs.
Intermediaries, on the other hand, must recognise the opportunity that income protection offers, especially given the current uncertain financial climate. With mortgage approvals plummeting and rising inflation leading consumers to tighten their belts. protection is a crucial area.
On this note, it is vital to realise that new clients are not the sole market for protection sales. A wealth of rate cuts and policy enhancements offer a massive opportunity to revisit existing client banks and improve protection portfolios.
It really is a team effort. If providers continue to build upon the innovation that has begun to become the norm rather than the exception, while intermediaries begin to appreciate the huge opportunities and invest the time and effort required with income protection, the renaissance of the product as a vital building block for people’s finances may begin.
Paul Wood is UK intermediary sales director at Pioneer