Protection markets are failing to evolve and must seize new opportunities if they are not to become dinosaurs in the the digital age, says Emma Walker.
With more consumers moving away from the traditional advice model, we must recognise that forcing customers down this route, puts many people off – particularly those who are unfamiliar in dealing with advisors.
Some aggregators have introduced ‘live chat’ options to guide customers and reassure them during the process. It provides them with the opportunity to ask questions at different stages of the application process or get relevant advice when required with the ability to take the journey offline.
Although it is early days, initial feedback from our customers has been positive and compelling – it is clear consumers want to engage online.
In addition, there is a need to recognise that consumers are no longer using the traditional methods for obtaining information when choosing financial services products. We are seeing consumers turning to other consumers to get the advice they need.
The success of online communities on sites such as MoneySavingExpert shows that consumers are turning to their peers for reassurance.
The massive growth of social networks sites such as Facebook and Twitter give consumers the modern day equivalent of asking your mates down the pub.
While peer-to-peer reassurance may not necessarily provide the best solution for consumers looking for protection advice, insurers need to recognise the opportunity that presents itself in communicating to a new audience who may understand the importance of protection, but not necessarily understand how to go about getting the right product or how much it will cost.
Education is the best tool to help plug the protection gap, not hard sales tactics. For those who still think digital is not the way forward, consider this. There were circa 2.5m searches on the term ‘Life Insurance’ through Google in the last year.
There has been a significant increase in searches made using a mobile device, with as many as a third of all enquiries by mobile in January. How many of these potential customers have come away with a negative experience of trying to buy life insurance through their device of choice?
We have placed so many barriers in the way of consumers, no wonder we have a serious protection gap issue. Smartphone users will happily make sure their latest gadget is properly protected, but when it comes to their own life, they do not hold the same values.
By recognising these new opportunities and adapting our model accordingly in order to help and drive consumer need, we could confine the ‘Protection Gap’ to the history books.
Emma Walker is head of protection at MoneySupermarket
