Amazingly, it is less than 30 years since a gentleman called Tim Berners Lee was credited with being the founder of the World Wide Web and, in doing so, provided our and younger generations with a platform to change the way we run our daily lives.
It seems almost inconceivable to most of us that certain things we take for granted now, used to be regarded as a real chore. Remember hand written paper airline tickets that we would personally collect from a travel agent? Or standing in a queue at a supermarket waiting for the cashier to input prices in to a till?
Some things however don’t change as rapidly as they could. Many would say our industry has been, and still is, slow to adapt to keep pace with new technologies and the advantages they bring. For the last 30 years at least, chasing a doctor for a medical report has been, and still is, problematic for many advisers. Although some companies are trying to work to resolve the problem, we are not there yet.
With the ability to collect all sorts of data at the push of a button, is our industry truly moving forwards at the pace it should? We know that advances in medical science have been so great that life expectancy levels have changed dramatically and, in theory, underwriting of cases should no longer be the issue it once was.
Despite the well-publicised “Protection Gap” getting larger all the time, sales of life insurance have declined rapidly in the past 15 years as a whole. Should we be asking ourselves why this is the case? Should we be making the products, pricing and process easier? Or is it a public education issue, where the value of various sorts of cover available require promoting? This is particularly important where the State is increasingly pulling away from supporting individuals at their time of need in sickness or disability.
To be fair to the intermediary sector, the IFA share of the market has held up very well and has not declined despite the overall market doing so, as illustrated below.
Source: Scottish Widows Protect
Providers have tried to make life easier for intermediaries and have evolved their products to better fit the needs of the customer today. Multi-benefit plans - that offer a range of types of cover - have become the norm and, due to pricing, the more cover that is taken out, the larger the discount offered. Providers have also changed their processing methods; question sets have been designed to pick up underwriting issues earlier in the process and many boast “straight through processing” or STP rates at 80% or above. Let's review, in more detail, a range of Provider innovations...
Royal London's offering of product combinations are as varied as clients’ demands, and their Personal Menu Plan has something to offer every client. They offer mix and match covers, terms and amounts to find the combination that’s exactly right for individual clients, and if budget’s an issue, you can play around with the combination of all those things to bring the cost to a more affordable level. This can happen all in one plan, with one plan fee, one direct debit and one set of underwriting.
In addition they say that their new online service helps make the process of applying for protection quicker and easier. Their “whizzy technology” means they can now give more clients an immediate decision, but if not they’ll at least give an indicative price based on the questions answered, making it much easier to set realistic expectations with clients.
With so many families in the UK living without enough of the right cover, menu protection offers a quick and easy way for you to talk your clients through a range of protection options. You can even add, remove or change the cover in your clients' plans to keep pace with their changing needs. Find out more by clicking here.
Sadly, none of us know what the future holds. There are 3 main types of insurance in the form of; Life Cover, Critical/Serious Illness Cover and Income Protection, and although we are much more likely to claim on our Income Protection policies, it remains the lowest sold product in comparison to the other two.
VitalityLife believe cost can play a major part in this. Again, they stress that multi benefit plans give the client the ability to be flexible with what they choose to cover. Just like choosing from a menu, they can have a little bit of this and a little bit of that. Plus it can all be wrapped up in to one application, one policy number and one direct debit.
They offer a case study showing the huge benefits of serious illness as opposed to critical illness which, along with their focus on health and well-being, sets them apart from other Providers. View their case study and claims stats to demonstrate this further.
AVIVA have concentrated their recent developments on their Aviva Life Protection Solutions (ALPS) system which has been designed to improve the 'quote and apply' journey, make writing protection business quicker and easier for brokers and they say that you agree.
In a recent survey of ALPS users 97% of respondents told them that the quote journey is easy or very easy to use. Broker feedback has helped to shape the changes they have introduced to further improve the efficiency and ease of use of the ALPS platform. If you haven’t read their ALPS user guide then take a look here. Plus, they’ve highlighted three key improvements below:
Extended acceptance period: They recognise that the point at which your clients need their cover to start can vary depending on their individual circumstances. To further accommodate this, they have increased the acceptance period from 90 to 120 days.
Remove a product: You no longer need to wait for a decision on an application in order to remove a product. You now do this from the quote summary screen, reducing the need to re-key applications.
All cases now signature free: To reduce the amount of paperwork you need to manage, they have also removed the requirement for a declaration or signature for life of another cases.
LV= also focus on the value that a multi benefit plan can add for clients.
What’s in it for the customer?
They state that the development of multi benefit (Menu) protection plans has helped in relation to obtaining “good customer outcomes” for Protection policies.
What’s in it for the adviser?
Their analysis shows LV= have seen an increase in the average premiums when multi benefit applications are submitted as well as better persistency.
So they believe it's better cover for the client and better business for the adviser.
Both iRESS and iPipeline are also working on trying to highlight the relatively low cost of Life Cover by bringing the cost the attention of the adviser and client as early on in the sales process as possible.
Life Genie from iPipeline due to be launched to a broader audience later this year, will try to better highlight the indicative cost of cover at point of sale and offer links to its Solution Builder package which helps to tailor client needs to budget
It remains to be seen what impact product design and process will have on the range of benefits available through Providers but, ultimately, it will be intermediaries who will support the growth of these sales moving forward.
With the average age of a first time buyer growing to the early to mid 30’s, it will possibly be the first time they have encountered a financial adviser when they visit a mortgage broker. One would hope that the adviser would be pointing out the benefits of life, CI and Income Protection cover available to the client, knowing that the application process should be sick, given the developments of the past 30 years.
At Paradigm Protect we certainly hope that the developments made by Providers will bring about a positive change to try to shrink the much heralded Protection Gap.
As ever whatever we can do at Paradigm Protect to support you, please let us know. You can visit www.paradigmprotect.co.uk where you can also find Provider specific information or call the office on 0121 781 7337.