Has the government's long awaited spending review focused the publics' mind on protection and health insurance to any meaningful degree, and do you think the industry will capitalise on it?
Peter Lurie, Proactive Medical and Life
The industry has certainly never seen a more fitting time to sell protection since the recession of the 1930s. While the government and the media continue to talk about cuts to the welfare system and the effect it may have on jobs around the country.
We all know that we have to make sacrifices, however, most individual concerns are based on general living standards rather than personal health and protection. The government has made it clear that it is increasing the budget slightly for the NHS, however, I agree with analysts that say this may be insufficient based on soaring demand.
The UK is proud of its heritage and the commitment to protect health spending, but as the NHS continues to contribute to the national deficit, the strain on the service may force more people to look towards medical aid as a form of peace of mind rather than a needs must. I believe it takes real stories of NHS failures to bring to light more public awareness of private protection, and it’is our job to make sure clients need protection in place to dispel these worries.
I totally agree with the government’s cuts on welfare benefit. “It is a hard road, but it leads to a better future.” The main new welfare savings come from withdrawing Employment and Support Allowance, the replacement for incapacity benefit, for some categories of claimant after one year. While we see a rise in unemployment we should also be focusing on protecting those in work against any incapacity to alleviate government benefit stress. The two go hand in hand and our industry should most certainly capitalise on this.
Andy Couchman, Protection Review
There’s an old advertising proverb that says you should sell the sizzle not the sausage. Given what’s in some sausages, that’s probably sound advice.
But, while the content of our industry’s sausage is pretty good, we have been less successful at selling the sizzle.
Too often, we focus on the minutiae, when we should be encouraging clients and the wider non-insured public to look at the bigger picture; to think strategically. That means helping people to take responsible action knowing that the solutions they buy offer not just good value, but also go way beyond the safety net that is the Welfare State – both in terms of financial benefits and in the help and advice that many of our products include too.
Ask an ad exec what the government’s spending review should be worth to our industry and they would quote a huge figure. But are we all seeing it as the opportunity it really is?
Rather than focus on the £20bn of benefits being taken away, we need to actively promote what can replace them.
So, we have an educational role. But we also need to persuade the general public to want to buy them – just as they do mobile phones and Sky TV.
One key to that is getting advisers to talk more about health and protection. At this year’s Protection Review conference there was a widespread view that we have a limited timescale to take advantage of this once in a generation opportunity. Now, it’s time for action.
Tal Gilbert, PruHealth
The government Spending Review has raised uncertainty in the public’s mind. On the one hand there is uncertainty in public services; whether the real spending increase for the NHS leaves enough space to account for NHS inflation and proposed reorganisations, whether there are sufficient capital maintenance funds for services going forwards, how funds being moved from the NHS to social care will be used, and the impact on public sector jobs.
On the other hand, there is uncertainty around spending with individuals facing an increase in the age of state pensions and reduced welfare benefits.
We have seen two responses in the PMI industry to tough economic times in the past 30 years; a surge in demand at the end of the 1970s, in contrast to a fall in demand in the early 1990s. The industry’s ability to capitalise on recent changes will depend on its ability not only to provide clients with security in the face of change in public services but also to provide customer orientated products that drive demand.
This, therefore includes not only looking after people when they are sick, but also helping individuals and workforces to stay healthy. This is crucial for individuals, particularly in light of their longer working years, as well as employers, who will rely more than ever on having a productive workforce. In the ‘sober decade’ ahead of us, employees and employers will be looking towards looking after their health as well as their finances.
John Godfrey, Legal & General
In the current economic climate, and the recent savage cuts in public sector spending, which sees the government retreating from the provision of welfare, there is an opportunity for the insurance industry to step in.
Although insurance was not part of the economic problem it does have the capacity to be part of the solution and this is a key time for the industry to both work harder with the public to raise the awareness that is needed to help consumers understand what they need to do to protect their future and with government to work in partnership to find joint solutions.
As experts in risk, the industry has an active role to play in both protection and health provision for UK citizens, individually (personal and business protection), as well as through group income and protection services via employer schemes. Group protection can play a significant role in helping get employees back to work quickly and therefore helping both the employee and the employer’s bottom line.
There is always much talk about the protection gap and this, now more than ever is the time to raise awareness and highlight the need for life and health insurance and close this gap.
The assets that insurance companies hold are significant and although these can be affected by what happens in the economy and markets, they have got the capital, expertise and appetite to help redress the balance between what the public sector has provided and increasing the role the private sector plays.
