Johnny Timpson: Protection must refocus on hierarchy of needs

Writing for COVER back in February last year, Jonny Timpson said that the industry was well positioned to respond to the need for improved access to individual and workplace protection insurance.

At the time, the British Insurance Brokers' Association (BIBA), which lead the Access To Insurance Signposting Workstream, had just launched its Access manifesto and the new voluntary industry  Access To Insurance Signposting agreement.

Of course, this was before the widespread outbreak of the Covid-19 pandemic that has had such a profound impact across the protection and health insurance landscape, with the Access To Insurance Working Group collaborating with industry, professional and trade bodies to ensure that protection insurance remained as accessible as possible.

Some 16 months later, Timpson is handing over his dual roles as Cabinet Disability and Access Ambassador for insurance and banking, with his successor due to be unveiled in due course, and he will also pass on responsibility for the Access to Insurance Working Group.

While the circumstances may have changed, Timpson's passion for improving access to insurance for the many, not the few, certainly has not. He tells COVER: "We have achieved a huge amount and I want to make sure that I hand over to my successor properly and support them make the role their own and progress an agenda to further improve access to insurance products, services and careers for people with visible and/or non- visible disabilities and health conditions, and in doing so, improve access for all.

"In terms of what we have been doing, I started this role three years ago and took a couple months to decide and scope what to do. I then formed the  Access To Insurance Working Group with its four workstreams and reference group to engage the industry and deliver my shared mission, at one point we had about 150 people working across those various workstreams, all of this activity pro bono. Each workstream decided on its priorities, which took about a year to test, and the second year was all about making change happen and building the change," he explains.

"What we have been doing over this last year is delivering it. It started in January last year with launching the industry voluntary signposting agreement in the House of Commons, and recently we announced the Underwriting Transparency Agreement. The only thing on my list that is still to do is deliver the Professional Knowledge hub; this activity is being led by the Chartered Insurance Institute (CII) and we hope to deliver its first Income Protection module shortly."

Refocus

With Timpson having established the various Working Groups across the Access to Insurance campaign, various industry and trade bodies will now take over ownership of these workstreams: BIBA will take on the signposting committee and underwriting workstream, the CII will assume responsibility for the professionalism workstream, and Group Risk Development (GRiD) taking ownership with the workplace workstream.

However, Timpson states that while there has been good work done, he believes that protection should refocus its attention on the consumer's hierarchy of needs to make insurance easier to access and grow the size of the overall market. Pointing to the 40,000 intermediaries that are active across various parts of financial services, such as mortgages and investments, he explains that only around 10% of those engage with protection on anything like a regular basis.

"We need to provide professional development support to help either those 4,000, so that the other 36,000 either get back into protection or signpost protection. I want to re-focus on the hierarchy of needs, because for 36,000 firms that are not participating in the protection marketplace, frankly, are not meeting their customers' needs and are walking past them," Timpson says.

"Where we are now with the Senior Managers Regime, Insurance Distribution Directive and a proposed Consumer Duty, there is an onus that we help customers identify their needs and then meet those needs. In terms of protection, the hierarchy of needs has been much forgotten, but it does start with providing a benefit on death and replacing income on death. Secondly, that we are able to replace income should someone be unable to work due to accident, injury, sickness or disability.

"That hierarchy of needs has fallen out of favour because we have seen people sell life insurance and critical illness cover ahead of income protection, so we need to revisit that hierarchy."

Collaboration

The fundamental driver of improving access to insurance, and therefore the wider protection industry, is collaboration. Advisers or intermediaries that are not working with their peers will ultimately not be able to provide clients or prospective clients with the broadest possible service and, potentially, deny cover to those that need it, albeit unintentionally.

"I work and network internationally in protection and we have some of the best protection advisory firms in the world in the UK, "Timpson proclaims. "So, have a commercial relationship and collaborate with some of them, and that works both ways, because the things they can't do like mortgages and pensions, they will refer back to you. But if you can't do that, rather than do nothing at all, use the 'Find Insurance' signposting service developed by BIBA."

But, he explains, that signposting model doesn't apply just to steering customers towards other advisers and intermediaries. Timpson highlights the importance of signposting vulnerable clients to appropriate charities and consumer groups, something that he was involved with during his time at Scottish Widows, particularly with cancer charity Macmillan and Mental Health UK.

"If it was a cancer claim, for example, we would deal with the insurance claim and obviously trigger RedArc services, but we would also put the consumer in contact with the guidance team at Macmillan. They would help the claimant access occupational benefits, welfare benefits, the concessions on council tax, etc," he says.

"Equally, they would contact, say, their mortgage lender and their car loan lender to trigger the vulnerable customer protocols, and do the same on utilities as well. We were also signposting to Turn To Us, a welfare benefits charity that helps people claim the welfare benefits that they are entitled to."

Proactive industry

Alongside collaboration, one of the other most vital elements involved in signposting is proactivity, not least when it comes to underwriting. While much of the good work that already occurs in this respect is on a voluntary basis, Timpson says that this is just a starting point, as evidenced by the recent Underwriting Transparency Agreement.

He explains that although there is an agreement to improve communication and ownership around underwriting decisions, for both underwriters and advisers, there is still that onus to take responsibility for unfavorable outcomes.

"When there is an adverse decision, it is important that a rational for the decision is available to the adviser and their customer, saying things like: ‘It's because of the reinsurer' has been referenced on numerous occasions and is not acceptable - As an underwriter, you have your own underwriting philosophy, it is that philosophy that drives whatever reinsurance treaties you have in place with your reinsurer. But fundamentally it is your underwriting philosophy," Timpson says.

"If you have arrived at your decision, own the decision and then be prepared to explain to the intermediary and/or the policyholder why you have arrived at that decision coherently and clearly, to give them enough information so that if they want to look elsewhere they can do that on an informed basis."

While the agreement is undoubtedly a positive movement for achieving this desired responsibility, the adviser or consumer must still make the request for the underwriter's insight, something that Timpson believes is an element that will need addressing going forward: "I'd like to get to a more proactive point where people don't have to ask for a rational underwriting agreement - in fairness, some providers will give that anyway, but this best practice  should be the norm and not subject to request."

Although Timpson himself won't be spearheading Access To Insurance initiatives anymore, he will continue to support his successor in his Financial Services Consumer Panel and other consumer roles. His experience and passion for protection has shown the industry how it can improve and make itself more accessible. As he says, the achievements he has brought about are a starting point, but the rest will be up to his successor to take forward and accomplish.