From pet cover to soap storylines, Kevin Carr dissects the latest protection industry developments in his exclusive monthly blog.
5. New life office(s)
If the number of media calls on this one are anything to go by, a new life office is set to enter the IFA protection space very soon. Competition is good, new ideas are good, raising the profile of protection is good. So it's hard to see a downside to any new market entrants.
Who might it be? Met Life and HSBC have been rumoured for many years, or perhaps it is the return of Simon Burgess. Or probably none of the above!
VERDICT: UP
4. Soap story-lines
It's still there in the soaps. Last week's Hollyoaks (don't ask, please don't ask) featured several debates around state benefits and how difficult it is to get by when illness strikes. Alas there was no mention of Income Protection, but we can't have it all.
What a shame there isn't a generic protection advertising campaign on TV to make the most of these story-lines. What a shame indeed.
VERDICT: UP(ish)
3. Family Income Benefit
Scottish Provident reported a four-fold increase in FIB sales recently, which is great.
FIB has always been a good little product that has so often been ignored and undersold. A quick recap: FIB is a life and/or critical illness cover plan, just like normal ones, except claims are paid as an annual income instead of a lump sum. While a lump sum is usually more attractive on the eye, there are times when an income is much more suitable - and cost effective.
Could we do more as an industry to increase awareness of FIB and make it easier to sell? Oh yes. Why oh why oh why is FIB a separate product with separate literature and thus separate and unnecessary costs? Why isn't it just a tick box on the main application form following the sum assured box which simply says ‘Lump sum or annual income?'
As for the name - whoever came up with ‘Family Income Benefit' should be forced on a date with John Terry until they both say sorry.
VERDICT: UP
2. Pets and humans
"It's staggering to think that so many people insure their pets against illness, yet they do not have the same urgency with their own health." David Thompson, CEO of DG Mutual.
Having recently acquired a pet of our own, I can confirm the insurance buying process for pets isn't that far apart from life insurance. There are all sorts of options, a long list of questions and plenty of potential pitfalls at claim stage if you don't read or understand the small print. Just like life and health insurance.
We can all defend the reasons why the process has become so complicated all day long, but if we don't get smart soon and make it much, much easier we might not have an audience to defend it to.
VERDICT: DOWN
1. Commission disclosure
Protection Review of course agrees commission should be disclosed, it's the fair and ethical thing to do.
However, many high street retailers and websites sell life cover, and they receive commission just like an adviser might (and in some cases potentially more commission than some advisers). Some, however, do not disclose it.
There should be a level playing field. If an adviser discloses commission then shouldn't everyone who receives a commission be required to act in the same way?
Also, there are commissions included with many general insurance products such as car and home insurance. Should these be disclosed as well? Where do we draw the line? Do we need to know how much profit the landlord makes from each gin and tonic we order?
Likewise, at what point should commission be disclosed - at the very outset, at the quote stage, at application stage, at policy document stage?
As with all regulation and good intentions, the potential unintended consequences should be thoroughly thought through.
VERDICT: TBC
Kevin Carr is chief executive of the Protection Review and managing director of Kevin Carr Consulting.
