Not every insurer looks at product development and design in the same way, so we also asked Jennifer Gilchrist of Royal London – one of the largest protection providers - for her views on the creative art of protection.
I have never thought of myself as being the creative type. While I can’t draw or paint, I like to think I can channel some of my creativity into designing propositions for the protection market – well we can’t all paint like Monet!
I’ve worked in protection for more than 20 years, living through the ups and downs. But what those experiences have provided is the knowledge and skills to adapt and think out of the box, developing traits that help to spot opportunities and adapt to challenges in the market.
Working as part of the proposition team within Royal London, our aims are firmly rooted in supporting the current and existing propositions but also keeping an eye on the future; the bumps in the road, but also the opportunities to be creative with new designs for future generations.
What's the process for new design or enhancements to existing products?
Each year we review our proposition roadmap that contains all the changes, enhancements, or new developments we will be working on. This review also projects some way beyond the current year, so that we are thinking about longer term aspirations or initiatives as well.
An example for this year is the ABI’s Critical Illness Minimum Standards review where we will look at definition changes or adapting products to the new guidance. For the medium to longer term, we will be looking at, for example, the FCA’s Consumer Duty; what gaps we anticipate we will need to consider across all our existing propositions and how we will facilitate a review and update of current practice for new design and development.
The creative propositions team at Royal London is split into squads and an experience and design team. The latter are firmly focused on the bigger picture; looking at medium to longer term proposition development aspirations, with the squads taking more of the responsibility for the short-term changes and their delivery. There’s an abundance of talent, with a wide spectrum of knowledge and experiences, bringing diversity to our propositions and allowing us to work well together.
Pricing is integral to our new design or enhancement process. Early on we involve colleagues from the pricing team in all the work we do so that we can get an understanding of the financial impact of the changes we want to make. A big part of this is understanding the value of any changes or new design and how this would sit in context with cost and pricing in the current market with advisers and consumers.
The typical lead time for an update to an existing product can be anywhere between a month to six months. With a new product, this can be considerably more. If we are looking at a completely new market, then we will spend time researching and speaking to the market and other experts including reinsurers, to make sure we get the new design and build spot on. It can take up to two years or longer for this end-to-end process to deliver. But there are other examples of new products being developed much quicker, in under a year, because they may be similar, for example, to an existing product. Re-using technology and capability already available to us can save substantially on time and cost in bringing a new product to market too.
How much formal research do you do?
In short, lots. Research and gathering insight is an ongoing process. We mostly use desk-based insight and research to start our forward thinking about new products and changes to existing products. This is also true if we are considering entering a market we are currently not part of.
In addition, we have both adviser and consumer panels for insight and research purposes, as well as for testing ideas and new products. The panels are made up of people (advisers and consumers) who provide independent and honest views on all things protection.
We value research and insight highly within Royal London and build all our development work off this. A recent example was the Underwrite Later proposition we launched in January 2021. We researched two different concepts for our new underwriting approach, and pitched these to advisers during some panel research. Both approaches were liked for different reasons, so we used this insight to design an approach incorporating most of the feedback from advisers. Since it launched last year, we have seen the approach go from strength to strength, and [have just launched] an extension to its development in April 2022.
What are the top three trends driving proposition design for protection?
The top three trends we are looking at are communication, digitalisation and, in the product space, income protection.
With the FCA’s Consumer Duty about to land, communication is one of our key areas of development. This spans products we develop, right across to the marketing support material we produce and to the support we provide for advisers, and probably wider into the trade and consumer press too. Traditionally, as an industry we have struggled with complexity and the use of jargon, but I think we are making headway in communicating with consumers and advisers much more effectively than before.
Digitalisation has been top of most providers’ agenda and even more so with the Covid pandemic. This has been a good thing in speeding up processes and getting new ones established to help with customer and adviser experience. I think this will remain on providers’ delivery agendas in the future, which isn’t a bad thing, as we need to keep pace with technology innovation and developments. It’s a criticism which the industry has been guilty of in the past, but we’re not alone in that. Dealing with lockdowns and remote working has shown many industries just what’s possible if there’s a collective will or need.
And finally, to income protection. For many years we have been saying that the greatest protection opportunity is in the income protection products space. This has never materialised, and the income protection market continues to be a poor relation when compared to the critical illness or life markets. It was put in the ‘too difficult’ box under the simple products initiative from a few years ago, but I think with the technology we have available to us now, maybe we should be reconsidering this.
It’s obvious the product needs a complete overhaul to remove complexity, rethink the application process and create real simplification rather than building it into the current model. Ideally this would mean stepping away from the existing product to start again with a blank sheet of paper.
Another trend that should also be looked at is added value services. They are growing in popularity and are now being viewed as being as important as the financial claims settlement. Helping Hand is Royal London’s added value support; it’s been part of our protection proposition since Bright Grey launched in 2003, and continues to provide valuable emotional and practical support. This year we have extended the support to provide preventative services such as mental health support through Thrive and musculoskeletal advice through Track Active Me. At Royal London, we advocate the provision of these services and the value that they bring for policyholders.
What are the three biggest challenges when it comes to developing new or updated products?
I think it is fair to say, like most companies, resource and costs are the biggest challenges to proposition design. There’s always far more proposition innovation ideas and changes identified compared to the amount of people and budget available, so it’s a balancing act. Royal London’s development roadmap is therefore balanced with short, medium, and long term aims so that we have a vision of the future and can then prioritise initiatives to support this.
Designing and making changes to products also comes with some key hurdles that need to be scaled. Any design idea needs to deliver good customer outcomes, so stress testing any change is necessary to anticipate and remove any harm to customers. Value also needs to be considered; we need to understand customer and adviser perspectives on the value of a change, and factor this into any design principles. And we need to look at any changes through a vulnerable customer’s lens. Only when all of these requirements have been satisfied are we in a position to start delivering.
So, to sum up, for me, bringing creativity to protection through the launch of new or updated products gives me real satisfaction. And when you see the benefit it provides people when they need to make a claim, it not only makes it all worthwhile, it’s a great reflection on the protection industry that we’re making a difference to people’s future.
Jennifer Gilchrist, Protection Specialist, Royal London