Be Brave and End the Protection Madness

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.
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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.

Fergus Muirhead: Consumer Insights from a Certified Financial Planner, Writer and Broadcaster – MPAF49

There’s no better way to find out what customers want than talking to them. And talking to lots of them.

My guest today is a Certified Financial Planner who’s been on a remarkable journey to build a parallel career as an accomplished writer and broadcaster.

Listen to Fergus’s fascinating stories from his dual life as adviser and media star. Hear his insights into what consumers really think of the financial services industry and what we all can do to help more people understand their money.

That’s all right here in episode 49 of the Marketing Protection and Finance Podcast.

Fergus Muirhead: Consumer Insights from a Certified Financial Planner, Writer and Broadcaster

Who is Fergus Muirhead?

Fergus is a Certified Financial Planner and an experienced writer and broadcaster.

He has written on all aspects of money and consumer issues for a number of newspapers and magazines; including Scotland on Sunday, The Sun, The News of the World and the Journal of the Probate Section of the Law Society.

He wrote a regular column in Moneywise Magazine and for five years he was consumer champion at best selling magazine Women’s Own.

As well as his writing credits, Fergus has appeared regularly on a number of radio and TV programmes; including GMTV, BBC Breakfast, Homes Live and Location Location Location.

You can currently see Fergus and hear him on Reporting Scotland and on the lunch time BBC Radio Scotland show, John Beattie.

Fergus’s links:

If you enjoyed this episode – Fergus Muirhead: Consumer Insights from a Certified Financial Planner, Writer and Broadcaster – please share it on Twitter or Facebook or LinkedIn and even Google+.

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Will We Witness a Customer Service Revolution Thanks to Twitter?

Does your business offer customer service via Twitter? 

Have you ever had cause to complain to or compliment a company on Twitter?

Personally I’ve often found it works better than phone or email. Take British Airways for example. I’ll get fed up hanging on phone. If it’s an urgent flight query email is too slow.

When tweeted British Airways are quick to reply. Other companies don’t embrace the instantaneous nature of Twitter though. Days can go by before ScotRail or TransPennine Express put fingers to keyboard.

There’s a flaw though.

Customer Service Revolution

The 140 character limit on tweets and twitter direct messages limits interactions. The company you’re tweeting with has to suggest an alternative method of communication to continue the conversation. And that usually means defaulting back to either phone or email.

Twitter are about to revolutionise customer service communications by removing the 140 limit from direct messages.

It’s genius.

They keep the micro-blogging advantage of the main social media platform but allow full conversations to take place in private.

For those companies that choose to embrace this innovation it’ll introduce a whole new opportunity to WOW their customers. Will you be doing this?

On the other side of the coin it also means those who choose to use automatic scheduling  software to send direct messages will be able to fill our in boxes with more clutter. But I’ll gladly put up with the latter’s inconvennience to take advantage of the former.

A question for you: How do you use Twitter to give great service to your customers? Please share your thoughts on Twitter or Facebook or LinkedIn.