Is the UK really the world's most sophisticated protection market? Andy Milburn asks for IFA input
Last summer Munich Re told the audience at the 2009 protection review conference that it believed the UK is the most advanced individual protection market in the world. A brave but honest opinion after discussions with insurers and colleagues from Australia, mainland Europe, South Africa, Canada, the USA and other countries.
This theme is continuing in 2010.
More and more protection people from countries around the world are getting in touch to ask for advice on how their markets can catch up with the UK in areas such as tele-underwriting, online underwriting, price aggregation and internet strategy among others.
We are planning two major research exercises this year into other protection market’s around the world.
The first exercise will cover the individual protection market in South Africa. In conjunction with COVER, we’d like to ask you for your help with this exercise.
The team are off to South Africa in May to meet colleagues in reinsurance, and to spend time with the major insurers and industry figures. So what do the readers of COVER want to learn more about from the South African protection market?
Here are a few suggestions to whet the appetite.
We will be spending time with insurers who focus on severity cover, trying to understand how that side of the ‘trauma’ market place has developed. Severity is relatively new to the UK,
but more insurers such as BUPA are now starting to follow PruProtect’s lead in this area. How does severity based cover compete with the traditional critical illness product design in South Africa? What types of benefits are included?
How do providers describe products and benefits in their marketing material? What are the issues affecting distributors selling severity cover in South Africa?
Straight through processing rates (STP) in South Africa are pretty high with some providers quoting statistics as high as 80% of business being accepted online. How do they do this? What affect does the high HIV positive population have on the way the cover is under-
written?
We all know that obesity is an issue in the UK. Without any prior knowledge one could imagine that South Africa suffers much less from obesity and the health issues it causes. Is this true?
We will look into survival rates for disability based products such as income protection and critical illness cover. Are they better or worse than the UK? Which conditions cause the most claims in South Africa? Some providers in South Africa offer a ‘catch all’ benefit designed to allow customers greater scope to claim for a serious condition that isn’t included in the usual list of benefits. Is this close to our own activities of daily living (ADL’s) or something we could consider as a long term option that could replace the much discussed total and permanent disability benefit currently being debated in the UK?
South African providers also offer specially designed lifestyle benefits for women covering conditions related to pregnancy and infant complications. Could we follow this approach in the UK? How does this work? Does it mean cover for female lives costs more? How could this approach work in a different country where legislation tries to limit different pricing based on sex?
How do consumers buy individual protection in South Africa? Is the internet used as much as the UK?
Is there anything we can learn from the ‘tone of voice’ that South African insurers use to deliver their key messages to consumers and distributors?
Do they use scare tactics or something different to educate consumers on the need for cover? We’ll try and find out the answers.
Nuts and Bolts will cover the key lessons that we learn from our research trip to South Africa in future editions of COVER throughout 2010.
Do you have any questions you would like us to ask while we are over there? Which topics are the most important?
Please get in touch with the team at COVER: [email protected]
or drop me an email at: [email protected] with your thoughts and suggestions for this research exercise, all of which are welcome.
Andy Milburn is head of marketing at Munich Re (UK Life)
