The chief executive of the Protection Review rates this month's developments in the protection market...
5. World Cup marketing
Everyone loves the World Cup. Well, some don't. But they should do. Right now it feels like every TV advert has got a bit of footie in there somewhere and, while I'm sure I'll be sick of it in a few weeks' time, right now it feels great.
I get a warm, tingly feeling inside when I see a great teaser ad for the World Cup - and one in particular stands out. I don't drink lager, but I may have to neck a pint of a certain brand beginning with ‘C' in a few weeks time!
I'm pleased our industry is playing the game too. Pacific Life Re and PruProtect, to name but a few, are running fantasy football competitions while Aviva has pictures of children holding, what looks like, the 1966 World Cup trophy. Bring it on! VERDICT: UP
4. The Future of commission
In a recent Protection Review survey, more than 80% of respondents, including intermediaries, life offices and reinsurers, believe commission will still exist in the protection market in 10 years' time.
It may well look different, and could have a different name but, if the majority view is correct, commission in protection might just outlast the FSA itself. VERDICT: UP
3. Fortis ‘Real Life Cover' commission up 10%
The Fortis Real Life Cover product is excellent. Ok, as one of the three main designers I'm a tad bias, but in short, if you know someone who needs to cover all the protection bases but for whatever reason cannot afford the perfect portfolio and/or is not interested enough to go through a complex menu-plan, this could be the product. And I know plenty of people like that.
Increasing the commission will draw attention to the product, which will hopefully make a few distributors take a closer look, which is no bad thing, but raising the commission probably won't impact directly on sales.
What advisers really need is better training, from an independent source, which typically means not from life offices, who can be patronising and counter-productive as this column has flagged before. VERDICT: UP
2. Critical Illness claims stats
The Telegraph recently ran a ‘league table' of declined CI stats in alphabetical order, showing the percentage of declined claims by each provider in 2009.
It showed that providers such as Legal & General, Axa, Bright Grey and Friends Provident refused 7% or less of all claims, while other providers were slightly higher.
This ongoing development of LifeSearch's original campaign is very positive for the CI industry. There was a line in this article which read: 'Aviva, Britain's biggest insurer paid out a total of £118m to 1,499 claimants on CI policies last year' which, along with falling decline rates, is exactly the kind or reassuring consumer message we need.
However, to repeat a point this column made many years ago, let us be careful not to fall in to the ‘league table' trap by using these stats to base individual decisions.
Paying more claims and publishing the statistics is gradually improving the overall CI brand, but we do not know when claims will arise and therefore we do not know whether the companies recommended will still be around when the time comes. Past performance is no guarantee for the future, which I'm sure I've read somewhere before. VERDICT: UP
1. Protection intermediaries need a trade body
Do protection intermediaries need a trade body to represent their interests? Are any of the existing bodies capable of doing so? Without mentioning any names, there is talk of such a thing behind the scenes, but it may still be talk in years to come.
What do you think? Do we need a few like-minded intermediaries round the table, who are willing to pay a little bit of money, and then ask those who depend on the business to match it - namely life offices and reinsurers?
Then we would just need someone to run it. Are there any volunteers out there? VERDICT: DOWN
Kevin Carr is chief executive of the Protection Review and managing director of Kevin Carr Consulting
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