Protection Tomorrow May 2021 | Page 13

EDITION 1 | MAY 2021

13

Thinking about when insurance companies give claims statistics ( e . g . 99 % of claim ( s ) paid out ), to what extent do you trust that these figures are accurate ?

Trust a great deal

Trust a fair amount

Don ’ t trust very much

Don ’ t trust at all

Cost is another area where reality and consumer perception are at odds . On average , respondents without IP think it costs £ 34.50 a month , but they would only be willing to pay an average of £ 17.50 a month . In reality , flexible product design means that both price points are achievable for many consumers .

Perceived value of protection

Approximatley , how much do you think income protection typically costs per month ?

50

40

30

20

10

0

0 10 20 30 40 50

Approximatley , how much would you be willing to pay for income protection per month ?

40

30

20

10

3 %

Less than £ 10

28 %

7 %

6 % 37 % 43 % 14 %

14 % _{12 %} 8 % _{7 %}

2 % 2 % 2 %

12 % _{10 %} 5 % _{4 % 3 % 1 % 1 % 1 %}

42 %

Don ’ t know

36 %

Understanding consumer motivations around protection can help to refine advice processes . Home purchase ( 51 % plus 28 % for moving to a new home ), having a baby ( 36 %) and getting married ( 25 %) are seen as the key reasons for taking out cover

These motivators are changing . When asked about future home ownership , 51 % of respondents who don ’ t own their own place say it ’ s unlikely they ever will and 42 % say it ’ s simply not as important to own a home anymore . Interestingly , the research found that just as life goals are changing , there ’ s also appetite among consumers for different forms of cover . An IP policy specifically for mortgage payments was seen as appealing by 46 % of respondents with a mortgage , while 40 % of tenants would appreciate a policy designed to cover rent payments

With consumers valuing protection , the industry must ensure it continues to meet their needs . More education coupled with product design to suit evolving needs will help the sector build trust and its customer base .

The challenge ahead as defined by Kevin Carr , CEO at Protection Review concluded ...

1 We have advisers saying they always talk about protection . 1 Most customers say they don ’ t remember it coming up .

1 We have an industry that is open and honest in publishing paid and declined claim statistics , but most customers don ’ t believe them .

1 We have customers who either don ’ t understand our products , or mostly get it wrong when they say they do . We have adviser firms doing well over the phone , while customers say they don ’ t want to talk on the phone .

1 And we have an industry saying COVID-19 should be driving protection sales , while customers are saying it ’ s not making a difference .

As an industry , it is our duty to support , educate and protect families in becoming financially resilient . However , as Kevin concludes ‘ advisers alone can ’ t reach everyone . So , let ’ s make a racket about the importance of protection . Because if we don ’ t who will .’

We would like to thank AMI for allowing us to access their research report also housing the views of Kevin Carr , CEO of Protection Review and Craig Brown , Director , Intermediary Insurance at Legal & General . For the full picture and further explanation and research results , download a copy and review the full report , available on AMI ’ s website .

0 Less than £ 10

Don ’ t know