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Surprise surprise, protection industry needs innovation

The Protection Review conference and dinner went like a charm a couple of weeks ago with many industry gurus giving their two bobs worth about what providers and advisers have been doing and should be doing to close the protection gap.

The general consensus was innovation, and loads of it. And as I mentioned in last week’s Money Marketing there is a bit going on.

Torquil Clark Life Insurance director Jason King told a captive audience he had quantified the problem of exhaustive application processes, armed only with his trusty tape measure, and found it was 29 metres long.

After someone attempted to flog him mobile phone insurance for £5 a month he felt compelled to compare this application process to that of £5 a month
worth of life insurance, which he found could buy £100,000 of cover, for a
36 year old non-smoking man like himself.

So he counted every piece of paper generated by each process and while the mobile phone insurance created 3.6 metres, a mere 12 pages, the 97 pages for the life insurance quickly filled his office.

He said: “Life insurance has never been cheaper. Prices are falling but people aren’t buying it as much as they should because of the process. For critical illness and income protection the underwriting is more stringent so even more paper is likely to be generated. We need to make the processes easier. This is not good for the environment but is hopeless for the consumer.”

Just Retirement protection category manager Paul Cowman spoke about bringing in standard application forms to make it easier for advisers and clients to avoid non-disclosure.

He said that the protection industry should follow in the footsteps of the mortgage and pensions sectors which have made this work for products such as equity release and annuities.

He said: “It would make it easier for the IFA and also for the client. A standardised set of questions would help to eliminate non-disclosure. Currently every insurer has a different form which makes things overly complicated. It is very rare that application forms for the same product ask for different information.”

After the dinner, the inspiring Dr Marius Barnard – creator of critical illness cover, one of the pioneers of heart transplant surgery and the winner of the Lifetime Achievement award – suggested providers concentrate on long-term care insurance as it is “the product of the future”.

He said: “Long-term care is the protection product that is needed more than anything else and I appeal to the big companies to resurge this product. It is the product of the future.”

He also called for more severity based products because medical advances mean illnesses are detected at an earlier, less serious stage.

And Lifesearch head of protection strategy Kevin Carr bagged the Personality of the Year award for getting all the good news about protection out there.

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