Protection providers necessarily expect clients and their advisers to think about the future but, says Jennifer Gilchrist, they should practise what they preach with innovative products for coming generations
I popped into the Design Museum recently to see the ‘New Old' Exhibition, which is showcasing ideas commissioned from designers for solutions to help meet the challenges of a rapidly ageing society. The exhibits were handpicked to show how design and technology could help people lead fuller, healthier and more rewarding lives into old age.
One exhibit that got me thinking was the visual representation of a bar graph that showed a predicted static birth rate could happen soon. The following chart does not fully do the exhibit justice but it does show the data.
Source: Design Museum
So how adaptable are we to the impact of a shifting age demographic in the UK population? Generation Rent, who are struggling to afford their own home and delaying starting a family, are sometimes not getting on the radar of mortgage and protection advisers and can be overlooked as a potential client as the focus remains on the traditional key drivers - the well-established mortgage market and the key life stages such as starting a family.
As our traditional trigger points for buying protection are changing we need to acknowledge that, for Generation Rent, it will be more about protecting income to pay rent than the requirement to leave a lump sum for loved ones on death.
It is not just the younger generation we need to consider when talking about protection as the exhibition was designed to show people gadgets and systems to help them live as independent a life as possible as they age.
We know people are living longer - for example, the number of centenarians in the UK continues to increase year on year reaching to just over 14,500 in 2015, according to the Office for National Statistics.
At the exhibition, they predict babies born in the future could potentially live to 103 years. So how well do we serve the needs of the older generation? The options currently available are too restrictive and not adaptable despite the industry's best efforts with menu plans and multi-benefit products.
Adapt to actual customer needs
This group requires tailored product solutions to help them just as much as the younger generation. What we need are products that adapt to actual customer needs.
A windfall after a heart attack and back at work in six weeks does not align to the actual impact it will have - so could we not perhaps link the financial support to the costs incurred while off work or pay towards the extra expenses during the period of illness? This seems more appropriate. Equally beneficial would be to have access to more practical help while recovering - for example, a cleaner, a carer or other added-value support services until the protected individual is back on their feet.
The current product range is not broken - I am not saying that - but I do think we need to take a fresh look at what we do and take advisers on the journey with us. We can build new, innovative products that turn the traditional protection market on its head, but we need to make sure we build products that meet customer needs and support advisers to help them recommend these new products.
After all, do you worry recommending innovative products to your clients may not stand up to scrutiny if they were to complain to the Financial Ombudsman Service? I do not know the answer to that and, until we build and test new products in the market, we will not know, but that is not going to stifle our desire to fulfil customer needs.
As we live in an evolving society with changing needs, it follows we all need to keep pace with the changes. I hope it is not going to be a bumpy ride, but I am looking forward to using what we know and what we can learn to meet the challenges the future holds.
Jennifer Gilchrist is a protection proposition design specialist at Royal London
'Confidence in protection is low' - Aegon
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