The Intermediary speaks with Niki Cooke about the current state of the protection industry and her market predictions for the remainder of 2023.
Given the current unstable economy and cost-of-living crisis, what do you think are the main issues currently impacting the protection industry?
The rising cost-of-living, including housing, healthcare, education and utilities has a significant impact on the protection industry.
Consumers have less disposable income to spend on insurance premiums or other financial products.
Life insurance is competing more than ever with monthly tv subscriptions, daily coffee purchases, insurance for pets and the rising costs of groceries.
Younger generations may prefer digital channels for purchasing insurances and managing their finances, therefore significant investment in technology and digital capabilities has to be a priority.
Consumer trust in claims being paid, exposure must continue to enable certainty for consumers that should there be a claim made, this will be paid by the insurer whether a more common instance, such as a fracture or a critical illness.
How do you think protection advisors should best adapt to this changing financial landscape, and how can they support their clients?
By not only ensuring clients understand the potential impacts of not having cover but also by highlighting all the additional benefits that can be used on a day-to-day basis (virtual GP, health checks etc).
Advisers should stay up to date on changes in the industry, such as regulatory developments, technological advancements, and market trends.
Attending industry events, reading trade publications, and participating in professional development programs.
They should also be proactive in identifying potential risks and opportunities for their clients.
For example, an adviser may recommend changes to an insurance policy or investment portfolio to better align with a client’s changing financial goals.
What are the main trends that you’ve identified in the industry over the past year?
The key area is the need for improvement is service levels with insurers.
Processing claims has to be a priority. The consumer is at an extremely point of vulnerability when making a claim.
Communication of the developments on the claim and prioritisation is absolutely fundamental.
The protection industry is experiencing significant changes as it adapts to new technologies, changing consumer preferences, and shifting market dynamics.
Companies that are agile, innovative, and customer-centric are likely to succeed in this evolving landscape.
With the pending Consumer Duty deadline of 31st July 2023 ahead, advisers and insurers must ensure that they have robust processes in place to the obligations set out by the FCA.
What do you think are the biggest opportunities within the protection industry right now?
There is a huge opportunity for mortgage advisers whose new mortgage business has dried up to discuss protection with existing clients.
The adoption of digital tools and platforms in the protection industry has accelerated over the past year, presenting opportunities for companies to improve customer service, increase operational efficiency, and create new products and services.
Looking forward, what are your predictions for the protection sector for the remainder of 2023?
There will be an increased focus on quality and value due to Consumer Duty.
Price only is no longer sufficient in terms of protection advice.
Solutions such as Protection Guru Pro can help mortgage and protection advisers to select products based on quality and best value providing certainty that consumer duty obligations are met.
Providing a consistent approach for firms meet the requirements of different client demographics across all their advisers.
Potential expansion into new markets, particularly in emerging economies and underserved communities.
This will include the development of microinsurance products and services that provide coverage to low-income individuals and families.
