Tag Archives: protection

Be Brave and End the Protection Madness

Financial Services, , , , , , , , ,

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.

Steve Casey on Protection on Platforms – MPAF48

MPAF Podcast, , , , , , ,

It’s been flat for many years and individual protection providers are searching for new ways to grow the protection market.

Relying upon price competition, adding features and promoting claims statistics isn’t working.

Riding on the success of platform providers could be one way to find that elusive extra business.

My guest today is Head of Marketing and Propositions at AIG Life. Having just launched a protection proposition onto the Transact and Nucleus Financial platforms, Steve is best placed to explain the opportunity that exists.

Hear Steve explain how protection on platforms works and how it interacts with a client’s investment portfolio.

Listen as Steve talks about the innovative pay as you go feature which means clients only pay for the cover they need.

That’s all right here on Episode 48 of the Marketing Protection and Finance Podcast.

Steve Casey on Protection on Platforms - MPAF48

Who is Steve Casey?

Steve Casey joined AIG Life in November 2012 when they were known as Ageas Protect.

AIG purchased the company at the end of December 2014 and they have now successfully rebranded as AIG Life.

Other than running a wholesale fishing tackle and bait company when he was much younger, Steve has spent his career in Financial Services in the UK, Far East & European markets.

He writes and blogs regularly on the protection market although a little known fact about Steve is that he appeared in Money Marketing once not talking about the values of protection but how to actually make the best beans on toast.

Steve’s links:

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Protection Insurance: 3 Steps to Fighting Against Confirmation Bias

Marketing, , , , , , , , , ,

It won’t happen to me. It’s too expensive. Life insurance companies will try to wriggle out of paying.

3 reasons repeatedly given by people why they won’t buy protection insurance (life cover, critical illness or income protection).

Protection Insurance

You’d think that with all the digital communications technology available, we’d be able to change these views. But they’ve endured for years despite evidence to the contrary.

Take the assertion that life companies will try anything they can to avoid paying out. Each year most companies publish their claims statistics showing this is clearly not true. Payouts are in the high 90 percents.

But look at the results of some recent research published by British Friendly.

They found only 2 per cent believe we pay income protection claims more than 90% of the time. And nearly 1 in 5 say we pay claims less than 20 per cent of the time.

Almost half believe we deliberately try not to pay them.

Why such a wide gap between what the public thinks and reality?

A Phenomenon called “Confirmation Bias”.

People seek information that confirms their view-point. If they believe that life companies deliberately wriggle out of paying, they can easily find articles, news reports and videos confirming they are correct. If they find any information proving they are wrong they’ll subconsciously ignore it.

The truth of the matter is there aren’t enough positive stories out there to balance out, or even override the negative.

Fighting against confirmation bias should be our number one marketing communications goal.

Here are three things we must do:

Stop believing the annual publication of claims stats, laudable as it is, reaches anything other than a few people, probably clients of advisers, outside of the industry. The public do not read Cover, FT Adviser or Money Marketing.

Start flooding the Internet with positive stories about paid claims and the families whose finances we’ve saved. The 7 Families campaign has the right idea, but 7 stories do not constitute a flood. Every provider and adviser must put out content, articles, videos, audio,  and interviews all building on the statistical truth that we pay claims with emotional stories showing the results.

Start using social media to drive Internet traffic to these positive stories so eventually, and it will take a long time, when people go looking for information to confirm their bias, they’ll find it harder to ignore the truth.

Digital communications technology means we can do this cheaply and efficiently. Come on. Let’s do it!

A question for you: What content would you like to see out there to help improve customer views about protection insurance? Click to share your thoughts on Twitter or Facebook or LinkedIn. And Google+ if you use it!