SPECIAL FEATURE: Making protection personal

Nia Williams

October 21, 2013

For most consumers, buying protection insurance is a personal thing. What drives and motivates them to pay a regular premium in return for the reassurance of knowing they have taken steps to protect their lifestyle and family is particular to each individual.

It could be driven by experience. It’s not hard to think of someone close to us who has suffered from ill health and worse, and that can act as a trigger for action.

It could be driven by necessity. When we take on large financial commitments such as a mortgage our priorities tend to change and we start to consider “what if?” – a way of thinking that simply doesn’t occur every day.

One of our biggest problems in the protection industry is that we’re not tapping into these emotions and making that personal connection with anywhere near enough people. And it’s not a problem that’s isolated to just one aspect of what we do either; it’s a trend that can be seen right across the businesses of insurers and distributors.

I think it’s time to change. Here are a few of the issues as I see them and how we could go about making protection more personal:

Marketing and promotion

There’s no hiding it; there are easier products to sell than protection insurance. The concept of paying for something that we hope we never need to use can be a strange one, and a challenge to overcome. So it’s time to focus on the messages insurers develop to help.

For too long, we have relied on the same simple tactic. To try and scare consumers into action by highlighting the worst that could happen, the financial cliff that you will fall off if your health takes a turn for the worse.

It’s easy to see why this has become the default approach and there is some merit in pointing out the obvious dangers. But, consumers are wary of scare tactics and are wary of insurers more generally. There is a real danger that they switch off to the message and don’t even take it in as a result. Isn’t it time to find a more positive way to share the risks of not considering protection?

More than just a number

Consumers today are hard to please. The ability to share information instantly to millions of people over the web has had a major impact on the consumer psyche. We all expect more of the businesses we choose to deal with and insurers are no exception.

With that in mind, buying or trying to buy protection insurance could prove a bit of a shock to some. Firstly, we’re used to setting the agenda these days. If I don’t want a receipt when I go into the Apple store they email it to me; it’s my choice. But, as insurers, we don’t often operate in the same way.

The usual approach is a default method of service and communication that applies to everyone, regardless of whether it works for them and usually just because “that’s how we do it”. As a result whether customers are happy or not they can’t do anything about it. Not good for the old customer satisfaction scores.

Where we need to be is a world where a customer defines how they want their service to look and how they interact with insurers. This is probably a world away for many insurers with the infamous “legacy systems” issue, but for those who don’t, a world of flexible, user-defined service and interaction waits – a world of happier, more engaged customers.

Adding value

As I touched upon earlier, the idea of long-term protection insurance is a little at odds with consumers who live for the now and expect instant gratification, which creates a challenge for all of us. So how do we make protection insurance more relevant and appealing to this mindset?

There’s no easy answer here. Some insurers have added frills and lifestyle benefits to their plans so policyholders can benefit from their plan even if their health is as it should be. This sounds great in theory but if it adds to cost will it not do more harm than good?

So, what else can insurers provide without putting more pressure on their premiums? Where I think we’re missing a trick is by not finding a better way to share one of our key assets – knowledge.

Day to day, we collect a vast amount of data about health and ill health which could be turned into insight and knowledge. We also know that an increasing proportion of the population is becoming more engaged with their own health. So why don’t we join the two up?

There’s been lots of talk about big data and how it could revolutionise the way we underwrite and price products but here is an example of how we can use what we already have to help make a positive difference in people’s lives.

If we could turn our statistics and expertise into useful content that we could share with policyholders and potential policyholders, we would improve perceptions of our industry and generate more trust and belief in what we do. After all, content is king these days and we have all the raw material to make for some of the richest, most valuable content going.

Sign up to our daily email