Changing consumer attitudes to protection is a long game. Two recent studies from The Syndicate and Drewberry Insurance reinforce this fact. Both confirm there are three main reasons preventing people in the UK from considering buying life insurance, critical illness cover or income protection:
1) They do not think they need it
2) They think it is too expensive
3) They do not think insurance companies will pay out
Looking back at articles I wrote 20 years ago, these top three reasons were the same then as they are now. I said at the time that face to face advice was the solution. That is still the case. It is a shame we have not been able to use all the technology developed in that time to squash these beliefs without the need for advice. But it is hard to shift consumer perception, particularly if there is some confirmation bias going on.
Most important to address is myth number three. Both the Syndicate and the Drewberry studies show that consumers still think the pay-out rates are as low as 50 per cent. But the protection industry has cleaned up its act in this regard. Publishing claims statistics show pay-out rates for life insurance are in the high nineties. Critical illness cover and income protection also cluster around the 90 per cent mark. The positive messages from many a claims statistic press release are not getting through to consumers. As an industry we need to address this and push out more positive content than ever before.
The Seven Families initiative is a good start but it is as if we need 7000 Families. Using the aforementioned technology anyone can cost effectively produce videos, articles, blogs, podcasts and the like to illustrate case studies. Digital and social media mean marketing campaigns are no longer restricted to those providers with deep pockets.
Eventually our positive stories will start to balance out the negative ones and consumer attitudes will change. But we all need to be in it for the long game.
The studies also confirmed that consumers think protection is too expensive. Note it does not say they want the cheapest possible rate, which has locked the industry into a spiral of cheap rates and harsh underwriting. We must focus our communications on proving to our clients that protection is good value. The reality is they have no idea what it costs.
Once again digital and social media allow anyone with any size of budget to contribute putting out positive messages here. However, as good as digital is, I still believe face to face advice is the best way to overcome the three objections. The key is to use technology to get as many people into a face to face meeting with an adviser as possible.
Roger Edwards works through Roger Edwards Marketing as a marketing strategist and speaker, and through Make Sense Partners when developing new propositions