Bright Grey and Scottish Provident held a recent summit on the future of critical illness cover. Roger Edwards outlines its conclusions
"Critical illness is a good financial product that is under-bought. It is so good that I have it myself."
A positive endorsement from the Mail on Sunday's Jeff Prestridge at the recent Bright Grey and Scottish Provident summit, The Future of Critical Illness (CI). And a sentiment that we need swathes of consumers up and down the country to replicate.
Of course, the fact that more people are not convinced and are not able to echo that is the very reason the protection sector needs to explore how the industry can turn the situation around.
The world of CI is not as rosy as we would like it to be. Sales of the product have been in decline since 2002 and despite the fact that costs have tumbled, consumers still are not minded to buy. To make any significant progress, we need to understand why this is.
The summit was organised to gather some collective thoughts and pose some questions. Is it a case of carrying out a radical overhaul of the product or do we just need to do a better job of increasing consumer awareness? Is adding more conditions the answer, or should we concentrate on simpler products? Perhaps it is better marketing or even having cheaper premiums?
Outmanoeuvring the obstacles
With those thoughts in mind, we gathered a panel of experts and an audience of protection professionals, including IFAs, insurers and underwriters, as well as trade bodies and the media to explore some of these thoughts.
On the panel were Prestridge, Nick Kirwan ABI assistant director, Neil McCarthy Direct Life & Pensions sales and marketing director, Melissa Collett Financial Ombudsman Service (FOS) ombudsman and myself.
The main aim of the summit was to discuss the options for reforming the product and improving the marketing in a bid to increase sales.
In the process, we also wanted to identify progress the industry has made in terms of regulation, processes and public perception and to consider what obstacles are in the way of improving sales.
An issue that has bewitched the industry is the number of conditions a policy should cover.
One of the opinions voiced was that providers should simplify the conditions covered and also explain the likelihood of being able to claim.
According to Kirwan, policyholders do not always understand when they can claim. He went on to say that he felt some very rare conditions were being added to plans just to score highly in terms of getting products rated and placed on panels, but might not justify inclusion from a customer point of view.
Kirwan stated that while everyone is in favour of more conditions, there may be some conditions no one has ever paid out on.
