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Seeking protection from around the world

A recent tour around Australia, South Africa, Singapore and Malaysia has flagged up strengths and weaknesses in the UK protection market, according to the Association of British Insurers and Friends Provident.

Representatives of the ABI and Friends Provident say their travels offered them a number of ideas they would like to see implemented in the UK.

For Friends Provident head of protection Mark Jones, who recently returned from an 11-day tour of the four countries, the strengths of the UK market clearly outweighed the weaknesses.

Firstly, Jones says the IFA market in general is not as developed in the four countries with large numbers of broker consultants relative to the number of IFAs.

Jones says while Australia is ahead in terms of offering early renewable terms, Malaysia is behind in its marketing material, which Jones says we used in the UK 20 years ago.
One unfavourable comparison was the UK’s focus on price. “These other countries have not yet gone down the route of price being king. None in any way appear to be as price competitive as the UK,” he says.

With his feet firmly back on British soil, Jones says he is now investigating further the sorts of things Friends could introduce into the UK market from overseas influence.
He says: “I’ve looked at these four countries and I’ve taken bits out of their propositions. If I can mould them together then I can end up with something that is less transactional.

“Now it would be a cultural shift for ourselves to look at this type of proposition but, that is certainly something I’ll be doing over the next couple of months. Finding out whether it is something that can be manufactured, would it meet an underlying consumer need and then whether distribution exists to do something with it.”

ABI assistant director of health and protection Nick Kirwan, who embarked on a similar tour, found that there is much scope for improvement around awareness and boosting protection sales in the UK.

Kirwan suggested implementing auto-enrolment into protection plans, similar to Australia, or, introducing a compulsory guaranteed lifetime savings account, as demonstrated by the Singapore Government.

A social insurance pooling scheme in India could also work in the UK whereby people who work in the cites contribute a percentage of their premium to providing group insurance to people living on farms in India, says Kirwan.

He says: “This is a tiny bit of cover but very important to them because they live so near the breadline that if there is a death in the family it has devastating consequences.”

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