Category Archives: Financial Services

Protection Providers: Please Stop Passing The Buck

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Good PR raises brand awareness and is a cost-effective way of getting stories out there.

But have you noticed a recent trend for a style of news story template that effectively passes the buck?

Buck

Protection providers particularly seem to favour this approach.Here’s an example from a recent news story in the financial trade press.

Providers urge advisers to help close protection gap – FTAdviser.com

Head of marketing at Cirencester Friendly, commented that the findings should serve as a warning to the adviser community and UK population as a whole.

“Protecting earnings is an important aspect of sound financial planning; those who are unable to work due to illness or injury face a dramatic reduction in their income which in turn, results in difficulty making mortgage repayments or paying rent, buying food and paying bills.

“Responsible advisers have a duty to ensure that their clients have put adequate safeguards in place should the worst happen.”

Read full article on www.ftadviser.com

Check out any trade publication and you’ll see similar news stories. In every case the company followed a typical three stage template. They:
  • Did some research that confirms consumers don’t have (or want) a product or service.
  • Craft a story around the consequences the consumers face by not having the product or service
  • Urge the industry, or segments of the industry to take action to solve the problem – in this case, “responsible advisers have a duty to ensure……”

It’s obviously a successful template because it generates column inches. A neat little press release structure that almost guarantees take up.

But isn’t there a bit missing?

What is the company telling the story doing to help solve the problem? Where is their advertising campaign? What about a series of case studies showcasing the experiences of people affected? Where are their tools for helping “responsible” advisers to make good on their “duty”.

The three stage template passes the buck to someone else.

We need a part 4 to this often used news piece template.

Instead of passing the buck, the company promoting the story needs to say:

  • This is what we are doing to solve the problem

Or.

  • This is what we are doing to help you to solve the problem

That’s not passing the buck. That’s saying were all in this together. It’s only together that we’ll kick-start the stagnant protection market.

Now it’s Your Turn:

Do you think Protection Providers are passing the buck? Please leave a comment or share your thoughts on this article because I’d genuinely like to hear your views.

3 Articles on Protection Issues Worth Reading and Commenting On

Financial Services, Marketing, , , , , , , ,

Three articles on Protection Issues caught my attention this week.

Check out what the articles said and what my thoughts are in response.

Do you agree?

3 Articles on Protection Issues Worth Reading and Commenting On

1) Research adds weight to protection gap – FT Adviser

The article says:

Research from Sainsbury’s Bank Life Insurance, provided by Legal and General, also found that of those without life insurance, 21 per cent did not believe it was necessary and almost half (49 per cent) said they could not afford it.
Read full article on www.ftadviser.com

My thoughts:

Half of people say they cannot afford it and yet research by Sun Life (and discussed at the Protection Review Conference) suggested 50% of people have absolutely NO IDEA how much Life Assurance costs.

The other half over-estimated the cost by 400%.

This suggests that the reality is that people “assume” they can’t afford it rather than they can’t “actually” afford it.

Research like this is all very well. It rams home a point that companies have made for 20 years. It always makes column inches in the Trades.

But what are Sainsbury’s Bank Life Insurance going to do about this? How are we going to over-come the perception that people have?

We need more positive communications out there. And that doesn’t mean more TV advertising – but a flood of content from providers, advisers, reinsurers and trade bodies.

Who’s up for that?

2) Tom Baigrie: Industry must generate positive protection headlines – Money Marketing

The article says:

It is our job as a collective industry to make as much noise as we can about what we do very well almost every time. The annual publishing of claims paid statistics and their continuing improvement have started that process creditably but they will now inevitably only live on as background noise. We need some new news.

Read full article on www.moneymarketing.co.uk

My thoughts:

Agree whole heartedly with Tom. I’ve said for ages that we need to tell more positive stories.

Not just a few. Loads.

7 Families is a great campaign but we need 7000 families.

Every claim is a potential video, audio, article, blog post or case study.

Future success and growth in the protection market will rest with the “Social Financial Adviser”.

3) Why are big providers holding back on UnderwriteMe? – Money Marketing

The Article says:

Concerns over expensive system changes and losing market dominance are holding back major providers from signing up to quote comparison software provider UnderwriteMe.

The software aims to simplify the protection sales process by providing fully underwritten prices at the point of sale.”

Read full article on www.moneymarketing.co.uk

My thoughts:

Two decades of price competition has created the “need” for Underwrite me.

The cheap rates that most providers put on the portals to hit that coveted top three stop are largely an illusion.

1 in 4 applicants, maybe more, end up paying higher premiums after underwriting. But providers won’t stop playing the price game because the industry continues to believe that cheapest is best (even though consumers have no idea how much protection costs at all).

UnderwriteMe solves this industry created problem. It gives the customer more information and an accurate price – and not a portal rate they might not get.

Some companies play this illusionary price game better than anyone else so it’s no surprise they want to stick with the things as they are.

What are you thoughts on these issues?

Please leave a comment or share your thoughts by hitting one of the social media buttons.

Be Brave and End the Protection Madness

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Is the individual protection market a little nuts?

Well, they say the definition of madness is to continue to do the same things and expect different results.

Protection Madness

The levers we repeatedly pull are to cut the prices advisers see on portals, add to the complexity of products by including more features and, more recently, publishing claims statistics to prove to ourselves we actually pay.

Arguably none of these tactics grows business. Lower prices do not stimulate demand as they do in regular markets. More features increase the need for advice but do not resonate with consumers. Claims statistics in the high 90 per cents look good on the pages of trade magazines but out in the real world people think we only pay half that.

However, the conversations going on in marketing meetings at protection providers all involve price, features and claims statistics. More of the same will not yield different results and we are back to the definition of madness.

And what about the unintended consequences of pulling these levers? The headline rate might be cheap but more people face health loadings after going through the endless underwriting process. Compliance requires a thorough evaluation of product features and creates masses of work for advisers.

As a result cottage industries spring up to solve the problems the levers create. New applications like UnderwriteMe try to get answers to the questions before the quote so clients get a more exact figure. Comparison portals become ever more complex to deal with menu products, longer illness lists and added value features. Super detailed product comparison systems like CIExpert become essential to satisfy the compliance process.
click here

This might seem an overly critical assessment of the market but having been part of the process myself for so long I know how difficult it is to break out of these constraints. If doing the same things does not grow the market then logically doing something different might.

I am sure that if we consulted consumers they would ask for simpler propositions, much shorter applications and a guaranteed payout if needed. But such a product would be more expensive because of the reduced underwriting. It would fail the price test. Fewer illnesses and added features might be easier to understand but would fail the advice and compliance test.

Even those companies that have tried products with reduced question sets in the direct to consumer or consolidator space have failed because they are attempting to push product on price comparison engines. A proposition that is up to 40 per cent more expensive is not going to cut it.

So how do we solve this conundrum? An annually costed premium might offset that 40 per cent premium price for a quick application product. No one has tried that yet so presumably lapse risk is a worry.

Perhaps someone needs to be brave enough to offer the two-question product for the same price as the fully underwritten one. While actuaries, scared by selection risk, might condemn such a suggestion as madness we have already agreed that continuing to do the same things as we always do is equally nuts.

A question for you: What would you do to end the Protection Madness if you could wave a Magic Wand? Please share on Twitter or Facebook or LinkedIn or Google+.

You can find the original version of this article in Money Marketing Magazine.