The protection market has come to the fore during the Covid-19 crisis. Despite the challenges presented by the pandemic, insurers have adapted at great speed to meet growing demand, updating policies in line with consumer needs in order to support borrowers amid the disruption.
For example, many providers began to offer virtual GP services to customers, rebates to those facing delayed treatment, and premium holidays to borrowers experiencing financial hardship.
You only need to look at the figures to see how provider innovation in the protection market has benefited consumers.
The Association of British Insurers revealed that life insurers paid out a total of £202m in claims during 2020, with £13.1m of these related to Covid-19. What’s more, recent statistics from The Exeter show that Covid-19 accounted for nearly a third (32%) of the income protection claims it received in 2020, with payouts totalling £10.1m.
The crisis has taught us the importance of the protection market in helping consumers through financial difficulty — and how crucial this sector will continue to be in supporting borrowers as we emerge from the pandemic and over the longer term.
The great strides that the protection market has made during the pandemic have been key in delivering much-needed lifelines to households and businesses across the UK. However, if this momentum is to continue, the industry will need to consider where its future lies and what growth opportunities are available.
Rising demand
One fact is clear: given the impact the Covid-19 pandemic has had on family finances and lifestyles, demand for protection solutions will continue to rise and consumer needs will become more complex.
Providers will, therefore, need to adapt accordingly, driving flexibility, choice and, most of all, innovation across their product lines. For example, launching support services dedicated to specific health concerns could go a long way towards boosting consumer engagement with protection, while improving the appeal and flexibility of products such as income protection could deliver similar results.
Feedback from advisers and distributors will be a major asset to protection providers in the development of products and services. Keeping in contact with intermediaries, networks and clubs operating in the protection space will enable insurers — as well as advisers themselves — to develop solutions that are suited to modern-day borrowers and, most of all, to stay on top of customer demand.
Advisers need to be supported if they are to deliver high-quality solutions to customers — another area where we are likely to see a continued, if not greater, focus from protection providers, distributors and trade bodies. In the digital-only era sparked by Covid-19, initiating protection conversations with clients has become more of a challenge for advisers in many cases. This is where delivering training workshops, online educational resources and easy-to-understand, consumer-friendly literature on protection will stand providers in good stead, particularly as demand for protection is expected to rise.
Employing tech
As part of this, providers should consider how the support they offer to existing protection advisers could differ for future generations of brokers. Technology has already provided many benefits for insurers, advisers and end-customers during the advice process, but the time has come for firms to realise the full value that technology can deliver for their business. Indeed, there’s an opportunity for insurers and advisers to simplify and improve the protection advice process even more with the help of technology, particularly when tackling non-disclosure issues.
Insurers could also be instrumental in improving access to protection-related services for consumers via technology, enabling further innovation in this market and ensuring that more borrowers have 24/7 access to the support they need. Technologies like these are set to play an increasingly important role in shaping the future of the protection market, so it is vital that the industry recognises this.
The protection market is in a pole position to continue developing and strengthening over the coming years, and there is a clear opportunity for insurers, trade bodies, distributors and advisers to be in the driving seat.
Doing so will better enable advisers to support their customers with their protection needs, and also make sure that the demands of end-consumers are met with ease and efficiency — two areas that will be key to ensuring the future success of the market.
Toni Smith is chief operating officer of Primis Mortgage Network
