The protection gap will only close if product providers commit at least 10 times more cash to educating consumers, says Lifesearch managing director Tom Baigrie.
Baigrie also challenged providers to answer six questions on the marketplace.
He said providers spend less than 3 per cent of their turnover on communicating directly with consumers but they should be spending more like 30 per cent. He said: “Providers need to get consumers to und-erstand their need for protection not life. Deploy your capital if you are serious about closing the protection gap and growing the market or it will all be about market share.”
Baigrie said each provider should concentrate on marketing products to their particular target sectors as this method would be more efficient than a single, market-wide campaign.
He said that most distribution is aimed at selling the least amount of protection, for example, the cheapest life insurance products, but product providers should be trying to sell as much protection as possible to every customer.
TOM BAIGRIE’S SIX QUESTIONS FOR PROVIDERS
- How do you sell something that people do not know exists?
- How do you sell insurance no one claims on?
- How do you establish, bravely and ethically, fear that will drive people to purchase?
- How do you say it is good stuff but you need to buy it carefully?
- How do you say, do not lie or we will not pay?
- And how do you make it profitable?