Industry heavyweights call for protection trade body

Ryan Bembridge

July 14, 2016

IP income protection rain umbrella

Protection specialists have called for a new trade body representing income protection, critical illness and life insurance providers, brokers and distributors.

Currently the Income Protection Task Force, the brainchild behind the Seven Families project, is a trade body lobbying for income protection but doesn’t encompass critical illness and life insurance.

Other trade bodies such as the Association of British Insurers, the Council of Mortgage Lenders and the Association of Mortgage Intermediaries incorporate protection but were accused of putting it too low on the agenda to properly promote the value of protection.

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Peter Le Beau, managing director of Le Beau Visage, said: “We need an overarching association that represents everything from income protection to critical illness and life insurance that combines a promotional zeal with a strong technical focus and which represents the interests of advisers and all intermediaries as well as providers, reinsurers and all organisations involved in the marketplace.

“It is particularly important that this organisation looks at all points of view so that in some situations it can  work with key stakeholders to change practices that might hold back the industry or represent important, balancing views if a member seems set on a course of action that might harm the industry.

“This is a big, bold idea with little in the way of detail or firm suggestion but that is deliberate because I think we need to ignite a debate that brings in suggestions and ideas from across the industry.

“It won’t be an easy or a quick process. But very often things that are worthwhile take a long time to come to fruition.”

Mark Graves, sales director at Sesame – who made it compulsory for advisers to bring up protection at the first mortgage meeting while at the Pink network – backed Le Beau.

He said: “Do I think we would benefit from a trade body to galvanise our resources in one area? Yes probably.

“Currently there are quite a few organisations like AMI and the CML with a vested interest but we don’t have one on the protection side. I don’t think it would take forever to set up.

“If you were going to put together this organisation you would need to include critical illness, protection and life insurance but I would also put in private medical insurance which we don’t do that much because we rely heavily on the NHS. Building and contents could also come under that one umbrella.”

He added: “Who should drive this? It’s easy for me to say this, but those with the resources to get behind it are life providers. It’s whether they can come together with a common goal.

“If providers got together would people like me and my colleagues come on board to support it? Absolutely, we would.

“There are three types of people that are selling protection: On one side you’ve got out and out mortgage brokers, then you’ve got mortgage and protection brokers and then you’ve got protection advisers – it’s the people in the middle that want to do both that need more support.”

Kevin Carr, managing director of Carr Consulting and Communications, agreed that the protection industry lacks cohesive leadership.

He said: “This is partly because of market sensitivities and commercial realities.

“But the bigger picture is that many believe the protection industry is dying a slow death, or at least the industry as we know it.

“So collaboration and new ideas should be welcome, even if those new ideas are ones that didn’t work in the past.

“You’ve got the ABI and AMI but protection isn’t their focus or second focus.”

Alan Lakey, director of CIExpert, backed the notion of industry having a coherent voice in order to lobby to the government.

He said: “Income protection should be treated the same way as a pension. It would encourage the takeup of protection which would reduce the strain on the National Health Service.

“What we suffer from within the industry is a lack of joined up thinking – sales of products aren’t going up but the population is rising.

“At the same time there there are cutbacks on sick pay.

“It’s illogical. It puts a strain on society which means higher taxes and national insurance contributions.”

He added: “The public doesn’t buy the protection it needs, it buys what it’s told to buy; otherwise it’s something that’s ignored.

“When it comes to the regulator we don’t seem to have a person who has taken control of protection. It seems to be an afterthought that will be dealt with by someone else.

“I’d like to see somebody at the regulator take responsibility.”

But not all providers are convinced a new trade body is required.

When contacted Chris McNab, protection product manager at LV=, said: “There are a number of trade and representative bodies that already exist to offer their members a voice regarding protection.

“We believe that supporting these organisations and focussing on working more effectively together, would be preferable to a new trade body.”