The investment market has lots of profiling tools that try to identify a customer’s attitude to risk and then relate it to a flexible investment plan.
Many advisers have their own protection modelling programs but there is no readily acceptable protection profiling tool to help people easily understand the financial risks associated with unexpected death, illnesses or long-term sickness. If there were, I believe more protection would be bought. More important, there is no effective central authority positioning the many and varied insurance solutions that can help mitigate these risks. It is a regular feature of these pages that it would be in all our interests if there were a centralised, consumer-facing message focusing on protection needs.
Similarly, comparing products is becoming harder for advisers and consumers, particularly for critical illness, as the definitions require increasing levels of medical knowledge to explain what is being covered. As competition becomes fiercer, providers introduce different product subsets that cover greater things.
Perhaps we can learn from the sunscreen industry. An example of something that has caught on and is readily understandable is the need for protection from sun damage and cancer risks from overexposure to the sun. It is a multi-million-pound, well targeted industry that provides simple solutions that are easy to understand. Simple, because it identifies the risk and provides an SPF factor solution appropriate to individuals. It is targeted at specific groups such as families with young children and women with warnings about the risk of long-term skin damage and premature ageing.
A similar product rating as the SPF factor could be applied to kitemarked protection products that deliver a minimum product standard that can be easily compared. The advertising and marketing of sunscreen products is correct – it is aimed at women generally. Pricing is important but often the value of contingency life cover, family income benefit and income protection is not positioned well enough with the female head of the family to create the need.
Standard protection profiling tools, linked to advised solutions and real-time pricing would not only bring the risks to life but also show how the industry can help solve these problems at reasonable prices. We could produce our own SPF – Simple Protection Features – that help people determine their own risk profile, help explain possible solutions that allow them to profile their own attitude to risk, and deliver options on where they can seek advice or buy solutions.
Perhaps your best marketing aid could be putting sending some sunscreen to clients suggesting a protection review when they are back from their summer break.
Neil McCarthy is sales and marketing director at Direct Life and Pension Services