Protection Review's Roger Edwards looks back at the learns from the 2016 Conference and ahead to what might happen in 2017 and beyond.
Was 2016 just another year of ’me too’ products and premium rate activity? Or did we start to see signs of change?
Two speakers at the 2016 Protection Review Conference rolled out the famous Einstein quote: “The definition of madness is to carry on doing the same things and expect different results.” In the protection insurance industry, using Einstein’s quote is almost as predictable as the sameness it’s trying to advise against.
Some speakers suggested little had changed.
We heard about another year of price wars in a market where price reductions never stimulate demand. We discussed how companies were still adding rarer critical illness conditions to an already long list to keep themselves in pole position in comparison systems, whilst consumers and advisers scratch their head in disinterested bafflement. And some pointed out again the initial price we quote to clients is not going to be the one they end up paying after the underwriting process. We lure them in with a cheap headline rate on the portals, but then clobber them with loadings once we find out their Body Mass Index (BMI) scores.
It’s true there’s much same old same old going on in protection. But it’s also true to say that we are starting to see hints of real change. We also heard about more customer engagement, interesting marketing campaigns, and product developments aimed at making things simpler and more accessible to clients. Indeed, at the conference delegates felt customer engagement, not pointless bells and whistles, is the way to grow the market.
Vitality’s discounts on cinema tickets, flights and gym memberships, seem to be grabbing people’s attention. Companies are pushing the practical help services, like those from Red Arc and Best Doctors, to the forefront of their propositions.
Maybe one day people will take out protection policies primarily to get access to these services, with the cash payments very much the secondary reason. Canada Life Group Insurance certainly seems to be heading in this direction with a heavy focus on the rehabilitation services it offers over the finance benefits.
It’ll take time to flip the emphasis on protection from financial to practical help, but these services are much more engaging than illness lists and premium rate cuts.
Helen White of the Money Advice Service spoke at the conference about tapping into emotions. In a very popular segment, she also warned the industry not to try and ’educate’ the consumer. Rather, try and use emotional stories.
We need look no further than the 7 Families Campaign to know Helen was right. With its seven emotionally charged video stories of real people facing financial hardship, 7 Families has created an uplift in income protection sales - the only part of the individual protection market to grow in fact.
7 Families succeeded because it wasn’t a promotional campaign. Of course, it contained a message - income protection is good - but it wasn’t designed as a series of video adverts. They were simply engaging stories which ended up being more powerful than adverts could ever be. It’s content marketing. Something the financial services industry hasn’t done until now. We’ll see more campaigns like this as companies realise the power of real life stories.
Helen wasn’t the only conference speaker asking for more stories.
Jeff Prestridge from the Mail on Sunday finished the conference by asking for more positive stories and case studies. With an emphasis on the word, ’positive’. The press will, of course, publish negative stories about any industry. But we need more positive stories to balance out the perceptions people have.
The UK population still believes insurance companies try hard to decline claims. We know it isn’t true and we pay more than 90% of claims. But it’s no good telling ourselves this good news at industry conferences. The public need to hear it and believe it too.
So, a strong hope I have for 2017, rather than an explicit prediction, is we need to put out more positive stories. In writing. On video. On audio. We want the positives to balance the negatives. We can’t do this overnight. It’s a long game. But we need to start now. And keep doing it in 2017 and beyond.
Every product provider. Every reinsurer. And every adviser needs to become a communicator as well as doing what they do in their day job.
Advisers like Cura, the special risks bureau, have shown what can be achieved on a small budget. Their ’Zombie Life Insurance’ info-graphics were engaging and funny. Their protection tips video advent calendar was true content marketing. Just think what those with deeper pockets could achieve.
2017 will be the year providers realise engagement is the way forward. Some will, at last, abandon their compliance fears around social media and content, and start pushing out more content.
Perhaps the obsession with product complexity and the so-called ’illness race’ will start to grind to a halt.
We’ll see more features involving added value services pushing practical and emotional support to equal prominence with the financial benefits.
Following AIG Life’s lead in launching a simple critical illness product, we’ll see other providers creating simpler products perhaps targeted at niche groups of customers.
We already know Royal London is planning a product aimed at people with diabetes. More product developments like that like that will follow.
We’ll also see pricing becoming more honest again. The price war, raging for the last decade, is an illusion, given how many people are rated on application. We’ll see more questions asked at quote stage, like the recent IRESS development recording BMI scores upfront. And of course, UnderwriteMe is looking to build a portal based on honest up front costings. Transparency also helps with customer perceptions.
In July 2017 at the next Protection Review conference, in the face of this new wave of engaging storytelling, we won’t have to trot out the Einstein quote again because we will be doing different things.