How can the insurance industry and Government better communicate with the public about the importance of getting adequate protection?
Market views
Roger Edwards, Bright Grey
The lack of awareness about the need for protection and the lack of knowledge among the public about protection products was clear during the debate surrounding the Royal Commission on long term care (LTC). Most people said they had heard it mentioned on the news but few knew what the details were and no-one knew the debate was about whether the Government would pay for care or not.
But it is not just LTC that suffers from this problem. Most people have no idea what the Government will provide if they cannot work due to sickness and they do not know the rules surrounding Government support for mortgage payments after redundancy. This points to the need for more education for the public on all matters of protection. We can start educating the next generation by introducing more financial services topics to school syllabuses.
For the rest, the industry could run a generic advertising campaign. This possibility has been debated in some industry working groups in the past, but the inability to agree on the format and content has prevented any ideas coming to fruition. The Association of British Insurers (ABI) should perhaps take on a more proactive communication role, trying to generate positive generic insurance PR.
What is also needed, but what is probably most unlikely, is brutal honesty from the Government so that people understand exactly what they can expect and what they should be funding for themselves.
Peter Le Beau, Le Beau Visage
I think the starting point in tackling any obstacles is for relevant parties to admit a problem exists in the first place.
As an industry, we haven't done much to illustrate the dangers of an under-protected country and many companies, even some in the risk market, aren't very keen on risk. Therefore, before we start trying to solve the problem we need to ensure the capacity exists to solve it within the industry.
Assuming the problem can be solved, the industry needs to decide what key things would give the public a better perception of the issues at large. The industry hasn't advertised generically for 40 years and I think the way forward would be for the industry, probably through the ABI, to set up a group, which is dedicated to the cause. The first step would be to take the problem seriously and then, to develop the sort of messages that will really grab attention.
It's simple but true. If the industry can create the sort of noise that gets risk on to people's personal agendas, the industry has got some pretty good products to help address the issues. If the public is mobilised, and this may be by generic advertising and good focused corporate advertising, the Government might start to sense the issue on its radar.
Let's hope we can continue to talk about the size of the protection gap. A £2.2 trillion hole in the protection layer is everyone's problem.
Alan Lakey, Highclere Financial Services
Inadequate communication has arguably been the delinquent factor behind the deluge of financial services complaints over the past decade.
Informed communication from providers and advisers will not only ensure a better understanding of financial services, but will also deflate many of the concerns that the non-specialist media has invented or exaggerated.
The Government should be aiming to foster a better knowledge of financial matters. However, the current Government's appalling track record in decimating the infrastructure of the industry and reducing public trust in all matters financial, begs the questions of intention and competence?
Any forward-thinking government should ensure that financial matters form part of the curriculum for ages 14 and above. A foundation in mortgages, protection plans, investments and pensions will serve to inform and enable future consumers to make judgements from a platform of basics.
The Government's conduit, the Financial Services Authority, does not have a charter to educate the public. A separate body, perhaps jointly run and funded by the industry, should be formed to provide basic information that avoids the sensationalist or the compensation culture approach.
One of the major areas of public education should be the acceptance of responsibility. Consumer responsibility is as much a problem as the failure by advisers, institutions and governments to explain financial matters.
Peter Barnett, UnumProvident
Financial planning, especially within the 35 - 45 year old age group, should embrace a hierarchy of financial decision-making, including debt management, protection and savings and investments. Consideration of all these elements is critical to a balanced approach. For example, protecting income against health problems, let alone acquiring other essential protection products like home and contents insurance, may be as important for safeguarding 'lifestyle' as is pension provision for ensuring a happy retirement.
While many people will be in a position to seek some of this important advice through an employer, not everyone is in employment and they will need to look elsewhere. The Government is keen to introduce a web-based financial planning tool. Hopefully, this tool will include a decision-tree, which refers to all elements of an individual's financial well-being so that the right decisions can be made with the right advice.
