There have been reasons to be cheerful in 2015. We’ve seen a number of new entrants into the protection market and some genuine proposition innovation. However, convincing consumers to buy protection remains a challenge. But a new year heralds a new start and as we look to 2016, I believe there’s a real opportunity to make our products more relevant for consumers and more closely aligned to their circumstances.
Here are my top five predictions for 2016:
Customers today are more informed, hands-on and discerning than ever before. This new type of empowered customer wants to do business on their terms, with companies that have products that are easy to discover, easy to use, and are personalised and relevant to them. These trends are changing the way people buy products and services. This creates a challenge and an opportunity for traditional industries like insurance, and providers will have to change to make sure they have the capability to successfully serve these increasingly discerning customers.
Digital and other direct to consumer channels will help to access customers but people will only buy if they’re engaged to do so. Advances in technology, particularly in digital and analytics will help providers meet these evolving consumer needs. The market will need to adapt their offering to the consumer in a way that suits them best, with ease and speed of offer.
Simplified products don't have to mean the cover is dumbed down. This is about offering cover where it counts and clarity of cover. After all, more than 80% of our critical illness claims are accounted for by only five illnesses1. This does question whether the current structure of the critical illness product will be sustainable. Is there an opportunity to move away from severity based definitions, partial payment definitions and an ever increasing lists of illnesses to a product that covers the serious conditions you are most likely suffer from?
As a mutual insurer, Royal London is well positioned to help fulfil the social promise of protection. The mutual sector has a long history of helping people to help themselves and this ethos is of paramount importance in helping to fill the gap left by the paring back of state provision.
A good example of this type of provision is the role that disability income protection has to play as part of a wider health and wellbeing strategy for employers and their employees.
In order to truly grow the market how can providers support intermediaries to engage with the mass market? Our challenge in 2016 is to build relationships with those consumers who are currently underserved when addressing protection needs. This is essential if we’re to close the protection gap and ensure more people are covered financially should the worst happen.
Debbie Kennedy - Head of Protection Proposition Design, Royal London
Source: 1 Royal London's UK intermediary protection business claims paid (1 January to 31 December 2014).