Delegates agreed that products are now majority rate-driven rather than feature, with Tenet distribution development director Keith Richards suggesting that 90 per cent are driven by price.
Highclere Financial Services Partner Alan Lakey said it depends very much on the product.
He said: “Term insurance is clearly rate-driven and income protection and critical illness should be feature-driven. It isn’t always but it should be.”
Sesame product research manager for protection Dale Tranter said the internet plays a big part in the battle between price and product features.
He said: “If you have got clients who are looking online and shopping themselves then there is a tendency to go for price because that is where the competition is going to be, rather then on selling the most appropriate product in the long term.”
Lifesearch head of protection strategy Kevin Carr said that technology had a big influence on the debate. He said: “It is comparison websites, the internet and portals available over the last decade that have driven this market to become more commoditised than it ever was before and arguably more commoditised than any other market in financial services.
“With anything that appears on the surface to be the same but varies on price, then price becomes the dominant factor.”
Carr also pointed out that advisers should not ignore price.
He said: “Price is always a factor of value in anything you buy. I guess the argument is, then, that a good adviser should move the customer’s mindset away from that but it gets harder and harder with the greater credence the internet holds.”
However, RGA business development manager Mick James questioned whether the market is customer-driven.
He said: “There are a lot of markets that are customer-driven but this market, it seems, is very much outward in. We manufacture things almost without a reference to the customer.”
The round table debaters
Kevin Carr head of protection strategy, Lifesearch
Alan Lakeypartner, Highclere Financial Services
Mike Taylorchief underwriter, Axa
Keith Richards distribution development director, Tenet
Dale Tranter product research manager for protection, Sesame