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June 2020 | Protection

Kevin Carr: Protection can be the pinnacle of insurance

Kevin Carr is chief executive of Protection Review and MD of Carr Consulting

It’s just insurance. Home insurance, car insurance, life insurance…

It’s all the same. No one likes it, no trusts it, and no one really cares.

That’s what I keep hearing in some sectors, and it’s no doubt true among some consumers, and maybe some advisers, too.

But it isn’t true for everyone, and maybe if we all pull together, we could reduce the number of people who think this way.

How many insurance-based industries find members of the public who could have claimed but didn’t have cover, and give them cover to show the benefits to others? How many publish exactly how many claims are paid each year by specific types of cover?

How many offer a range of free and relevant add-on services, such as counselling, GP helplines and second opinion services? How many insurance industries continually pay well over 90% of all claims every year?

The protection industry has a questionable past, especially if we include payment protection insurance (PPI) in the mix, but as the years roll on, and as technology improves, the modern protection industry is one that is standing up to be counted as being open, honest, relevant and fair (just google Max Brett and AIG for a really great and moving example).

Perhaps most importantly, the protection industry is about people and family – rather than being about possessions, such as pieces of metal with tyres or a leaky roof.

In a time of deep concern around who we can all trust in any walk of life, the protection industry can be an unlikely source of reassurance – and become the pinnacle of the insurance world.


Pre-existing condition exclusions

Some adviser firms, including Assured Futures, are arguing that there is a simple solution to the problem of drowning in postponements, declines and applications stuck in the protection pipeline.

What if applications for life, critical illness (CI) and income protection (IP) that needed futher underwriting were on-risk with full cover from day one, with a pre-existing condition exclusion until the process has been completed?

Would that significantly increase conversation rates and reduce the number of cancelled applications? Or might it ultimately cause more problems than it solves?

Ian Sawyer, commercial director at Assured Futures, says the client could be given three options to consider once the application has been underwritten.

First, if the decision is unchanged, the policy simply continues at the same price with the exclusion removed. If the decision is different, such as a loading or exclusion, the customer can accept it and remove the exclusion, or keep it as it is.

Lastly, if the decision is different but the premium is unaffordable, the policy could continue as it is with the exclusion still in place.

Assured Futures’ Sawyer says: “This could be a relatively simple solution, and the benefits are significant for the industry because it removes the need to keep people engaged during the application process.

“The advice [and] sale process becomes much easier and the underwriting ‘journey’ changes from being a time-consuming psychological barrier, to something that happens in the background after your policy has started.”