Australia’ s retention model: Behavioural insights
Australia ' s protection market has successfully leveraged behavioural insights to improve retention rates. Many insurers use data analytics to identify patterns associated with cancellations and proactively intervene. For example, they might flag policies at risk of lapsing and implement targeted outreach campaigns to address customer concerns or offer flexible payment options.
The UK could benefit from adopting a similar data-driven approach. By integrating advanced analytics into customer retention strategies, insurers can proactively address pain points and build stronger, more enduring relationships with policyholders.
Lessons from emerging markets: Simplified products
Emerging markets such as India and South Africa have embraced simplified insurance products to cater to a broader audience. These products often have fewer exclusions and are designed to be easily understood by first-time buyers. The result is increased penetration, particularly among underserved populations.
The UK industry, while advanced, can take inspiration from this approach to reach younger or more price-sensitive customers. Simplified policies with transparent terms can make protection more accessible and appealing to a wider audience.
Leveraging the FCA survey for industry transformation
The FCA Pure Protection Survey provides a platform for the UK protection industry to reflect on its current practices and benchmark itself against global standards. Here are three key areas where the survey can drive meaningful change:
1. Improving sales practices: Sales quality has long been a focus of the FCA, and for good reason. High-pressure tactics or poor suitability assessments not only harm customers but also lead to higher cancellation rates. The survey can help identify gaps in sales practices and encourage the adoption of global best practices, such as consultative selling and digital onboarding tools that enhance transparency.
2. Enhancing customer-centricity: The survey is likely to shed light on how well insurers are meeting customer needs post-sale. Drawing from international examples, UK insurers can focus on creating personalized customer journeys. This includes regular touchpoints, such as policy anniversary check-ins or health updates, to reinforce the value of their products.
3. Addressing affordability and accessibility: Affordability remains a barrier for many UK customers, particularly in the current costof-living crisis. The survey could prompt the industry to explore innovative solutions, such as micro-insurance models or pay-as-yougo policies, which have been successful in markets like Africa and Southeast Asia. These products offer flexibility and affordability without compromising on coverage.
Looking ahead
The UK protection industry is at a crossroads, with the FCA Pure Protection Survey poised to be a catalyst for change. By learning from the successes and challenges of other markets, the industry has an opportunity to reimagine its approach to customer engagement, product innovation, and retention.
Ultimately, the goal is to create a more inclusive, transparent, and customer-centric protection market that meets the needs of today’ s consumers while preparing for the challenges of tomorrow. The FCA survey is not just a regulatory exercise— it’ s a chance to reshape the industry for the better, ensuring that protection products deliver value not just at the point of sale, but throughout the customer’ s journey.
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