With the protection sector dominated by giants of the insurance world, Owain Thomas spoke to Cirencester friendly's Paul Hudson to hear a smaller provider's view
Provider co-operation in a sector as diverse and competitive as the income protection one is always likely to prove tricky, so if agreement can be reached on dealing with the state sector, perhaps it can also happen when considering publishing claims statistics.
This is a subject close to Cirencester friendly's heart and where Hudson believes the industry could be more joined up, so it is not surprising he is disappointed to not be involved in developing a solution.
"One standard used by all will certainly engender confidence in the sector amongst both IFAs and consumers," he said.
"Unfortunately, whilst we and some other Holloway providers have been publishing claims stats for many years, and have been attempting to push for a standard format, we now hear that the ABI and Health Claims Forum are also looking to publish a standard format."
Another industry project to increase customer confidence is the creation of a Quality Standard mark for products, and this is something that the friendly society is fully engaged with, alongside Exeter Family Friendly, HSBC and Friends Provident.
The venture is currently in its feasibility stage and the plan is for it to be approved by the Office of Fair Trading (through their Approved Codes Scheme) and supported by Which?
"Anything that puts IP on the agenda, seeks to raise standards and gets people talking is to be supported and demonstrates a positive step in raising awareness," Hudson said.
"If the feasibility stage shows it to viable we expect other companies will want to be involved but do not see it as a whole industry initiative. That would be for the ABI to take forward. A Quality Standard is ideal for products that are sold directly to consumers and it is positive for IFAs as they use ratings such as this in their fact finding.
"We would like the standard to focus on possible consumer detriment issues, for example the importance of claims stats, rather than the number of ancillary services a provider is able to cost in, which may not be relevant for many sectors of a consumer audience," he added.
In September, Cirencester friendly released the details of a study conducted with IFAs about the IP market.
The results showed advisers were optimistic about the future of the market despite overwhelmingly expecting fewer IFAs to be practising in the sector and fewer products to be available.
While these results may appear a little contradictory, Hudson believes they show that IFAs are able to take a wider view of the protection world.
"I believe IFAs recognise that the State benefit system is going to be very different in the future," he said.
"IFAs who currently sell IP, I suspect, will become busier on the protection side of things, and it may attract IFAs who currently don't sell IP. So whilst RDR will have an impact on the overall number of IFAs in the market, the opportunity and need for IP could well increase.
"I am sure," he continued, "IFAs also recognise that consumer buying habits are changing, that there are only so many consumers an IFA can talk to, that there are some consumers who do not want financial advice, and one could hope that there may be too many consumers for existing IFAs to service.
"For any number of these reasons, IFAs recognise that providers will have to develop additional ways to market such as a direct to consumer approach, alongside the well established, but possibly smaller intermediary channel," he concludes.
