International Investment's sister title Cover canvassed the protection industry to find out what the hopes, predictions and expectations of advisers, networks and providers are for the next 12 months...
Lloyds Banking group protection director Rose St Louis
"We have had many false starts on awakening the protection need and really starting to see the protection gap close. 2023, and the implementation of Consumer Duty, is the point where the whole industry needs to look at themselves and each other, and genuinely ask 'are they doing the right thing by customers?'
"This is not about doing the minimum to comply, but demonstrating purpose, desire to engage, identify and solve customer problems, and maintain that relationship beyond the sale.
"Customers face tough choices in the current economic climate and as an industry, we need to show why we are relevant and the value that we bring on a day-to-day basis. Additionally, we must be where customers need and want us to be, providing a range of options to engage on their terms.
"Personally, I am hugely excited by where we are positioned in the protection market. We have a growing IFA business, real commitment within our organisation to enhance the experience for customers and intermediaries and some exciting new features to bring to market. Additionally, we have the added bonus of engaging directly with our Lloyds, Halifax and Bank of Scotland customer base though our Cavendish Online acquisition, providing opportunity to understand and meet the protection needs of those customers."
FutureProof founder David Mead
"My prediction and dare I say hope is for the continued uptake by GP surgeries in their use of electronic health records.
"Pre-pandemic, about 20% of GPRs were being completed digitally; many providers are reporting a 50% uptake now. The challenge for 2023 is for the couple of providers who don't collect GPRs in this way to get onboard and for all of us to encourage the remaining 50% of surgeries to embrace this technology.
"After all, this is a genuine win/win for all stakeholders: the GP surgeries as they won't be getting constant calls asking when they are planning on completing the report; providers, as they will save time and resources; and most importantly clients, who will get their cover in place faster, much faster (less than 14 days on average, compared to two to three months using the paper-based method). I live in hope!"
LifeSearch chief executive Debbie Kennedy
"Quality will become the defining feature of our industry in 2023; quality of the sale, quality of customer outcomes and quality of ongoing customer engagement.
"Insurers will have profitability of business and evidencing good customer outcomes front of mind and will be seeking distribution that can deliver on this. Customers will be seeking out new solutions that enable them to protect their income and allow them to better access health services as their concerns about NHS pressures grow.
Digital transformation in our industry will no doubt play a big part in this to create digital health products that have a unique single integrated experience for the customer."
Legal & General Group Protection claims and governance director Vanessa Sallows
"In 2023 the group protection sector will play a critical role in helping protect employees, should they be ill or injured and unable to work, as well as helping them proactively manage their wellbeing. As individuals' personal budgets are significantly challenged, it is encouraging to see employers' continued commitments to enhancing the wellbeing of their employees and in so doing minimising the health and wellbeing gap that could widen as the recession bites.
"Group Risk providers have a vital role to play, in which partnerships are key - joining up thinking across multiple wellbeing and clinical specialisms, providing the data and insights needed to help employers manage organisational wellbeing. Growth in the market relies on this evolution in thinking."
Sesame Bankhall Group head of protection and GI Propositions Emma Thomson
"Despite the challenging economic climate, and an expectation that the protection market is likely to be down 5-10% on 2022, I'm feeling optimistic for 2023. Consumers arguably need advisers more than ever to help them make good financial decisions, whether that be arranging new financial products or reviewing what they already hold, so there is a huge opportunity for advisers.
"A fall in house purchases and Consumer Duty also means more mortgage advisers will increase their focus on protection; at Sesame Bankhall Group we are helping those firms either arrange the cover themselves or refer to a trusted protection specialist.
"A key priority for both advisers and insurers for 2023 should be to increase engagement with existing customers to ensure they are aware of the valuable cover they hold; this will reduce the likelihood of cancellations due to financial pressures. It's going to be a challenging year ahead for us all, but one filled with opportunities too."
Reassured director of corporate strategy Phil Jeynes
"2023 will place pressure on firms in the form of the FCA's Consumer Duty, which looms large on the calendar.
"This initiative is yet to be taken seriously by a worrying number of distributors and insurers. However, those firms already putting the customer first and treating them fairly have little to fear.
It is likely that 2023 will see those firms dipping in and out of the protection market finally committing one way or another, with an increasing number of partnerships on the horizon."
Plus Financial Group commercial director Matthew Chapman
"In 2023, as the reality of the cost-of-living crisis really starts to bite, advisers will need to work hard to remind their clients of the importance of their cover, the value and the additional benefits it can afford them. I personally see Consumer Duty as a really positive force for change in 2023 as it encourages advisers to think more holistically and to regularly review clients' needs to ensure cover remains suitable and fit-for-purpose. This will drive better outcomes and may also help reduce lapses over time.
"We will see advisers looking to diversify and explore new opportunities as an antidote to the volatile mortgage markets. We are already seeing an increase in the number of advisers looking to advise on Business Protection contracts and I expect this to continue throughout 2023 and beyond. In fact, I believe this will be one of the biggest growth areas in the protection industry in the years to come - particularly if I have anything to do with it.
"Despite the obvious challenges, I believe 2023 will be one of the best years ever for our industry. I believe we will see more collaboration across the industry, greater focus on value and financial resilience, product and underwriting innovation and improved consumer engagement - the latter being a strangely positive side-effect of the sharp rise in living costs and need for regular income. Well, let's hope so anyway!"
LV= protection sales director Mike Farrell
"Given the potential economic uncertainty that we are facing in 2023, people will be keen to ensure that they can keep a roof over their heads. The trigger point for buying a protection policy used to be buying your first property, and some advisers have recommended income protection as part of the protection during the mortgage process but a number did not.
"So, as a result not enough people have this valuable cover. In 2023 there is an excellent opportunity for advisers to highlight the need for income protection and also to tailor the IP solution to a specific customer's needs.
Our research into the nation's financial resilience showed that 19% of UK workers would struggle to pay their mortgage or rent if they couldn't work for two months due to illness or injury. Also, 25% of workers surveyed have less than £1,000 of savings (or no savings at all). One could argue it might be more effective to get customers to take out an income protection plan, which would provide peace of mind and mean they can remain in their home if they were off longer term. Then they can look to build their savings safety net to deal with future financial shocks."
The Openwork Partnership head of business development & adviser services Setul Mehta
"I'll start with the challenge that will present itself - claims will be made and beneficiaries will be contacted who are no longer linked to the life assured because advisers or clients have not updated the records (in turn meaning the true beneficiaries won't get the pay out quick enough or even at all).
"The positive I'm expecting is the average age of a client that is protected to go down to early 30's thanks to social media content and a younger generation of adviser coming through."
Heath Protection Solutions director Naomi Greatorex
"A hopeful prediction is the review of flexibility in protection plans by insurers! We need to make insurance policies more flexible, particularly around income protection and being able to make changes to deferred periods and review/remove exclusions throughout the plan's term. Some companies are making great steps here, let's hope the others follow in 2023."
Gregor Sked, protection development and technical manager, Royal London:
"2023 will see the full implementation of the FCA's new Consumer Duty. Providers and adviser firms of all sizes will be under more pressure to measure whether they're delivering good outcomes for clients, with a fundamental shift of focus for many financial advisers moving from treating customers fairly to treating customers well and demonstrating that they are doing so.
"This creates a massive opportunity to either ensure advisers are having the protection conversation with clients directly or they're referring clients to a protection specialist; 2023 will really bring the phrase write it, refer it, don't ignore it, to life."
Robyn Allen, founder and director, Robyn Allen Solutions:
"I predict that there will be a lot of conversations around Consumer Duty, as well as advised vs non-advised in 2023, and I don't see that as a bad thing. A consistent approach is what is needed for consumers, from both advisers and insurers.
"What will that look like? I don't think anyone really has the answer for that….yet! I want to see more fun, more engagement and to keep growing the protection community, because the more of us there are, the stronger (and louder) the message becomes. People first, always!"
Zanele Sibanda, head of internal markets, Towergate Health & Protection:
Mental and financial wellbeing will become more important than ever, with one impacting the other and vice versa. This, coupled with the cost-of-living crisis which is likely to spill over into 2023, means that both insurers and advisers will need a belt and braces approach to ongoing customer contact and retention.
"Although not yet as prominent in the health insurance and protection world, embedded insurance is gaining prominence in the general insurance world and this will be one to watch in our space."
Justin Tarog, managing director, VitalityLife:
"The incoming year continues to be one with challenges for consumers, with uncertainty around inflation, higher interest rates, and the rising cost of living continuing to put pressure on Britain's families. At the same time, pressure on health services and the ongoing impact of the pandemic means health remains a priority for most.
"Against this challenging backdrop, the importance of protection provided through life and health insurance remain of paramount value. Providing additional support, continual value and helping people manage their premiums, whether that's through improving their health and financially rewarding them for doing so, providing richer benefits, plus competitive pricing which fairly reflects individuals' behaviour, will feel increasingly important and ensure that protection feels more relevant than ever before.
Louise Colley, director of retail protection, Zurich UK:
"Looking ahead to next year, thinking about the breadth of our customers and their different needs will remain paramount. Pressures on household budgets will continue to dominate, so flexible options are crucial - making it easy to reduce or extend cover to fit individual circumstances.
"People will be looking to cut outgoings so advisers will need to work hard to reiterate the benefits of a safety net and the impacts of not having one. Life cover is the last thing people should be looking to cut, we know from our Hidden Costs of Cancer research published last month, that illness brings with it additional financial pressures. However, there's a balance to be struck. Where finances are stretched, some cover is better than none."
Sue Helmont, executive customer champion, AIG Life:
"I predict 2023 will be the turning point in consumers' trust of protection insurance. And Consumer Duty will be the driver.
"Whether you're a financial adviser or an insurance professional, we're all expected under the FCA's Consumer Duty to take a customer-centric approach on every decision or innovation and make sure that what we do is right for customers. Over time, it's going to lead to a higher standard of customer protection and raise the bar on customer centricity. It will also mean we'll be able to identify earlier through ongoing suitability checks when a customer's circumstances have changed and any vulnerabilities they have.
"What will be interesting is to see what the improvements will be and who gets first mover advantage in both consumer trust and business potential. Everything is on the table; from how products are designed, priced and shown to provide value, to how we communicate with customers.
"Proving that we're doing right by customers is going to need a big increase in reporting and transparency to show how our actions create better customer outcomes. When the regulator says it expects us to know how the companies we work with are acting with customers in mind, providers and distributers will need to regularly produce and review management information on consumer outcomes. That's good for our industry because it will mean us working together more."
