Steve Bryan, Marketing Director at The Exeter talks about making protection personal.
There’s no hiding it; there are easier products to advertise than protection insurance. The concept of paying for something that won’t ever be used if all goes to plan can be a strange one, and a significant challenge to overcome.
There’s no doubt that as an industry we have been guilty of over-complicating things in the past, with perhaps income protection the prime offender. This is a product that has consistently been recognised as the most important aspect of most financial portfolios, but a product that has failed to capture the attention of consumers and, as a result, advisers.
For too long, we have relied on the same simple tactic. To try and scare consumers into action by advertising the worst that could happen, the financial cliff that you would fall off if your health takes a turn for the worse. Scaring clients with well-known facts, such as the statistic that one in two people will get cancer in their lifetime, is often not the best approach. Discussing death – and the related need to buy protection – in this way can actually cause consumers to close up and suppress any desire to engage in the conversation.
It’s easy to see why this has become the default approach and there is some merit in pointing out the obvious dangers. But consumers are increasingly aware of scare tactics and arguably are wary of insurers more generally. There is a real danger that they switch off to the message and don’t even take in the importance of it as a result.
We are also all increasingly demanding consumers these days. We’ve become used to getting exactly what we want, the instant we want it. The growth of internet shopping means not only can we nearly always find what we’re after, we can easily find it for the best price. We’re used to deals, special offers and incentives to buy; all concepts, which until recently have been alien to insurance. The difficulty with protection insurance is perhaps hardest of all to understand for modern consumers, that if all goes to plan, they’ll never need to use what they are paying for and hopefully never even speak to their insurer.
As many consumers will trust their adviser to make the right decision and recommend the appropriate products for their personal situation, Advisers really are the shop front for protection, so we need to be focused on this audience of experts. But rather than advertising protection to them, we need to be arming them the with knowledge and skills to start those difficult conversations with their clients. Many consumers simply don’t believe they could find themselves in a scenario where they would be too ill to work, but that is why it’s key for advisers to find ways to bring up the topic. Strong interpersonal skills and having the right tools to hand will be essential here since advisers will need to read conversations with their clients very carefully in order to judge when it’s the right time to bring up the idea of securing protection.
Rather than scaremongering consumers with facts about ill health, productive conversations such as determining whether the client has any savings, how much is saved and whether they would be willing to use these funds to support themselves, should they need to, will start to frame a more personal conversation about their protection needs. What drives and motivates them to pay a regular premium in return for the reassurance in knowing they have taken steps to protect their lifestyle and family if the worst happens, is particular to each individual. We need to help advisers to make protection personal to their clients.
For an example of why this approach works you need only have to look at Martin Lewis’s Money Saving Expert website. Martin took the simple idea of helping families think about and manage their finances and what started as a simple and niche idea soon grew as consumers realised, they needed to spend more time considering their financial situation.
Once consumers come to this realisation, and only then, we can start to use advertising to debunk any myths or misconceptions about income protection insurance and talk about the clear benefits it can offer, which are more than just financial. Explaining how this type of cover can also help people to recover and get their lives back on track more quickly by alleviating any financial concerns while they recuperate. The practical support and value this insurance adds to a client and their families are often valued higher than the insurance benefit itself.
The statistics showing how little of the nation have income protection highlights the need of advisers to educate their customers on the necessity of this type of insurance in order to maintain their financial resilience. As such, advisers need to make sure that their customers understand the need to protect their household and financial position if an unexpected illness or injury should arise. It’s easy to think that these incidents only happen to someone else – but as the industry knows only too well, in reality they can strike any client, at any time.
Rather than advertising the merits of our products, or the awful things that could happen to you without them, we should be focused on helping the adviser community to guide their client to the realisation of how insulated – or not – they would be from financial hardship if they were unable to work for any reason.