Consumer research earlier this year conducted by MetLife highlighted trust in insurance as a contributory factor for those choosing not to take out a protection policy.
This was not a surprise, given that every piece of consumer research on the subject I have ever seen carries the same message: people do not believe it will be easy to claim, or that the claim will be paid.
As an industry, we have put considerable effort into countering this misconception, most notably through the publication of claims statistics.
Those old enough will remember that this was not always the norm and it took considerable industry coercion to get insurers to make details of claims paid versus declined into the open.
I believe this is good practice, and adviser feedback is consistent in saying that it helps considerably when recommending protection to their clients.
Since claims statistics have become routinely published, the market has not grown materially
However, a cynic might suggest that the evidence is not in my favour. Over the years, since claims statistics have become routinely published, the market has not grown materially. And as noted earlier, general consumer sentiment remains unchanged.
This is partly due to a general mistrust of financial services, not helped by various negative stories and events over the years, along with – as was noted in our research – some poor general insurance experiences.
Indeed, just thinking about my own recent insurance history, both my home and car insurers quoted a vastly inflated renewal price, which immediately reduced significantly when challenged.
While anecdotal, I suspect most of you reading will have had a similar experience as well as, like me, a poor claims journey to match. In my case, a car insurer low balled my son when writing off his car and immediately increased its settlement figure by over 15% when challenged.
Given the more regular nature of general insurance claims and the fact that the majority are mandatory and renewed annually, it can seem like the protection sector’s positivity push is fighting a losing battle.
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However, rather than accepting financial services will always be viewed with suspicion and mistrust, I would advocate for a redoubling of efforts.
We must, as an industry, continue to hold ourselves to account with regards to both claims handling and transparency. This helps advisers rebuff customer assertions that our policies will not pay and should be a source of great pride for our market.
Additionally, we must strive to find and publish case studies that bring our products to life. This is not easy given the very private and personal nature of many of our claims, and the myriad data protection and privacy laws that necessarily restrict our ability to share information.
Real-life stories, however, remain our most valuable tool when showing prospective customers why our policies are vital. When advisers themselves need to use a protection plan, the story can be even more compelling.
This was demonstrated by Scott Thorpe, CEO of TMG Mortgage Network, who has publicly shared his story to highlight the benefit of taking protection.
Real-life stories remain our most valuable tool when showing prospective customers why our policies are vital
Scott’s ten-year-old daughter Amelia had a horse riding accident that necessitated a trip in an air ambulance, a couple of nights in hospital and pins to repair a badly broken arm.
Thankfully Amelia is recovering well and enjoyed some time off school. Thankfully, too, Scott had a policy that covered his children and paid out for both broken bones and stays in hospital.
While he was always a great advocate for protection, this stressful time has strengthened Scott’s belief in the importance of cover as he has seen it in action; imagine the passion with which he will now recommend it to his next customer!
I am certainly not wishing for accidents to befall the loved ones of more advisers, but I am renewing my commitment to finding and sharing more real-life stories with which we can promote protection and improve customer perceptions.
I urge you all to do the same.
Phil Jeynes is head of individual protection, UK at MetLife
