Fortis has just launched two new products after much hype. What do you think of Real Life Cover and Your Life Plan and do you think they will become industry templates for product innovation?
Julie Smith, AWD Chase De Vere.
Both products seem to be well thought out from product design to underwriting stage and will go some way to reduce the ever mentioned protection gap.
Real Life Cover offers a one-stop shop for a basic level protection at a realistic cost, filling a prominent gap in the market that has previously not been filled. It combines core offerings of life cover with auto terminal illness, critical illness (CI) for the main claim areas, income protection (IP), recuperation cover and child and partner's carer cover, with the added options of extended carer's cover and unemployment cover at an extra cost.
Your Life Plan, while a more traditional menu style plan, offers a choice of life cover, CI, family income benefit and IP. It has several unique features that include high maximum ages for both life and IP cover, a welcomed relaxation of rules relating to terminal illness benefit and a temporary disability option to name but a few, which makes this a very worthwhile product.
To address non-disclosure issues, both products have a fully reflexive underwriting system that has the ability to tailor to clients' individual circumstances, as well as offering a tele-underwriting service run by a team of fully qualified underwriters.
One criticism is the time it takes to read and understand all the benefits offered, however, this will truly be time well spent.
Ian Smart, Bright Grey
Having the product all together in one place with very few choices to make, means it is particularly consumer friendly and ideal for the mass market. The plan states the IP amount as a lump sum and says it can be drawn down as 1% a month, which is a good option for some clients.
Although the product successfully combines elements of life cover, CI and IP with an option for unemployment cover, it is pretty much a one-size-fits-all product with little flexibility. This is a strength in that it introduces to the client the need for different kinds of cover and is relatively simple to explain but it is also a weakness in that it is impossible to tailor the level of cover to suit different needs.
There are already plans in the pipeline from a number of providers to offer something similar. In developing these it is hoped the industry will not see innovation just for the sake of it but instead will welcome ideas that really cater for clients needs and help grow the market.
With the industry witnessing tough competition in light of the credit crunch and a shrinking mortgage market it is very positive that a new provider is entering the protection market. It reinforces that despite difficult financial times there is a big protection gap that needs to be addressed and the industry needs to continue to innovate to help fill it.
Andy Milburn, Munich Re
There is talk at times about a lack of innovation in this industry, overlooking initiatives such as tele-underwriting, claims best practice, wellness based products to name just a few. Real Life Cover is another tangible example of innovation to add to that list and Munich Re welcomes its introduction. Will talk of the industry lacking innovation now continue?
The product is appealing in that it takes some of the key elements of CI and IP and adds them to the core life cover benefits that most consumers buy. The idea of it filling a gap in the market that other more comprehensive products fail to do is attractive. Its attempts to make cover simpler and more affordable for blue-collar workers are positives and it is a good 'starter' product for fulfilling customers' protection needs. Carer cover and recuperation cover are important areas that many still fail to consider.
It is difficult to remember a product design that was so heavily influenced by one distributor before. Perhaps the success of Real Life Cover is measured by how many people buy it, but it does need more providers and distributors to come on board in order to attract new customers. For some, Real Life Cover will be a good option, for others the more traditional menu based products may be the better one. Fortis has made a humble product launch and there have been no aggressive comments about it so far.
Peter Le Beau, Le Beau Visage
The new product that Fortis, and soon Royal Liver, has just released is a breath of fresh air if you believe as passionately as I do that people need new clear solutions to protect the key aspects of their lives.
This product first came to light some time ago and I was privy to some of the concepts that Martin Werth of Fortis and Tom Baigrie of LifeSearch had developed. The separation of cover is appealing and although my preference lies with a product that provides IP throughout people's working lives, the drawdown facility is a decent and sensible compromise.
The acid test will be consumer reaction. Interestingly, it is not as simple a concept to a very uninformed public as the industry may have expected. Simplicity is much harder to achieve than sometimes thought.
It is hard to bring fresh thinking into the protection market. The industry talks about innovation and then when it arrives it is criticised because it is different or because the ideas were invented somewhere else. That is not the way to close the protection gap or persuade people they need cover.
Possibly, the way to make progress is to absorb some of the new thinking that has been developed with typical customers and to challenge conventional wisdom with ideas that really deliver solutions to the customer needs. Real Life Cover has begun a process that the industry must not allow to peter out. The prize is too important.
