Protection firms' striving to gain "extra tick" perfection in product comparison tables has complicated life for advisers while still "ignoring" the real needs of consumers, warns protection expert.
Instead, the competitive search for the best product features has only added to the "complexity" and "confusion" as well as increased the amount of small prints.
Roger Edwards, products director at Edinburgh-based protection firm Bright Grey, believes the protection industry has to start looking at the needs of consumers and advisers before developing new products.
Outlining his belief in the Protection Review 2004 report, published last night, Edwards says the term 'customer focused' is something which the protection industry has so far been using but does not seem to have understood.
Compared to other industries, he believes it has fallen short when it comes to conducting consumer research.
He explains: "With insurance, at best we run a few focus groups, mainly made up of distributors rather than customers, and seek their approval for a bell or whistle that in all likelihood might not meet a real customer need. In our industry, it is all about product features that give the provider an extra tick in the tables of industry comparison services.
"But what do those ticks mean to the end user of that product?" he questions.
There is a risk all the extra product features on offer is neither helping the adviser nor the customer, he adds.
"Because not only do we keep adding bells and whistles that we haven't asked consumers if they need or want, but we explain those 'benefits' in a language that only serves to add complexity, confusion and additional small print."
A good example of this, he says, is the introduction of the critical illness buy-back option. It allows people with CI policies, who have already claimed their benefits, to buy back some more cover to protect them if they go onto having a second and different critical illness.
But the added "tick" does not seem to have met any particular customer needs, he deems.
This is "a perfect example of adding complexity for the adviser we were meant to be helping, while ignoring the real needs of the client who will ultimately buy and use the product".
He warns if the industry does not start to listen to what consumers really think about different products, the UK protection gap will just keep on growing.
A recent report by Swiss Re suggested the 'protection gap' has grown to £2.2trn.IFAonline
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