Businesses are seeing budgets stretched in many ways, but, as Owain Thomas found, advisers who are creative with solutions could produce a windfall for themselves in the group critical illness market
VIRTUES OF DEVELOPMENT
Although it appears fairly quiet on the product development front, that does not mean advisers should sit back and expect the market to tick over without their input.
Potential tax changes could make it more attractive to employers to enter into the market while technology is being utilised in new manners to push the market forward.
As Paul Avis, head of marketing at Canada Life, explained, there are many things they can do to persuade employers to get more involved.
"At present, the Office of Tax Simplification (OTS) is looking at whether they need a P11D for any benefit for under £100 per employee per annum so a small sum assured employer sponsored CI may not require a P11D.
"If the OTS says it will disregard anything less than £100, that makes it simpler and simultaneously easier to administer cash plans and CI products on small sums assured," he added.
This, Avis hoped, would placate those employers frightened or overwhelmed by P11Ds and could open up the market substantially.
It also addressed another of his bugbears with the industry the insistence of some advisers to quote only for the maximum sum assured when a far smaller ratio is often adequate.
"The key challenge is not to over-egg the sum assured because if someone suddenly gets a £100,000 to £200,000 lump sum, they might leave your company.
So why do advisers always quote for eight times salary? Why don't they do a fixed £30,000 or £50,000?"
If the OTS does follow through on its current thoughts to reduce demands for P11Ds, quoting only high values would discount this possibility as the annual premium would surpass the limit.
The ability to cross-sell is also something advisers should be looking more closely at with group CI and IP, typically offering 12% commission compared to group life's usual 4%.
This is often typified by intermediaries not utilising data they already have from group life schemes, and as Avis noted, present technology means a CI quote can be generated in just minutes with the same data.
"With the recent soft group life market, some of those savings could pay for a CI or two-year limited IP plan," he continued.
"How we communicate the value of the benefit to employees is important, too, and this is where new media can be really useful.
For example, an audio-video presentation aimed at employees is fantastic - especially when at claims stage, you can send that person a link about what Best Doctors or Red Arc does.
"And we've been developing an interactive claims assessment, too," Avis concluded.
If any or all of these measures have the desired outcomes, then advisers could be first in line to present the benefits to employers and ignite a steadily growing market to major growth.
