PruProtect has launched two new products with a whole raft of developments that it thinks will reinvigorate the protection. What are your first opinions of the provider's work?
Ian Brown, Skandia
While we do not usually comment on a competitor’s range, product innovation and design is something that we pride ourselves on at Skandia. We welcome any new developments that will reinvigorate the market and encourage consumers to consider their future health and protection.
It is important that providers continue to engage with consumers because it appears that providers have not been able to do this in the past and I’m still not sure if we are getting there. We are looking at ways to do this more effectively. It is quite difficult at a time like this when people are thinking about what they spend. I’m not sure anyone has cracked the best way to make people aware of what the risks are yet.
It is very difficult to make that first contact with customers and get them to appreciate what would happen if the worst did occur and they were unprotected. We can’t scare people. That was the word that came out when we used the critical illness (CI) claims sales aids – there was some research that showed that the aids were scary but, at the same time, were not scaremongering. That’s the fine line we have to tread without going too far by using statistics that aren’t necessarily relevant.
The protection market has not escaped the credit crunch and needs to become more effective in helping consumers understand the need for protection and building products that best satisfy changing and evolving requirements.”
Clive Waller, CWC Research
Peter Le Beau once described income protection as the Cinderella of the protection market and the expression caught on.
This was despite the fact that 95% of senior managers at insurers and reinsurers rated income protection IP at the top of the protection hierarchy.
The harsh reality is that it has been easier to sell CI cover so this has been where the marketing pound has gone.
Times change and CI has had problems such as the wrong sort of cancer and poor claims payment rates on TPD. At the same time, the other disability product, payment protection insurance, has had press coverage almost as bad as MPs.
The entrance of PruProtect into the market can only be good. They offer a primary product with good cover and a very comprehensive product at a time when some others are looking at stripping down. Such diversity is good for the market. It is good that they have focused on the needs of the self-employed, a big sector for many adviser firms. The promise not to underwrite at claims stage is positive. If claimants feel conned, rightly or wrongly, the trust bond is broken.
PruProtect continue to promote the healthy lifestyle and link this with a commission uplift. This gives them the ability to engage with advisers about the issues that impact on morbidity, not to mention remuneration. This has to be positive.
The challenge will be to persuade healthy customers that they are at risk of serious illness.
Andy Chapman, Pioneer
It is great to see PruProtect come into the market again with a bang. We need the household names to boost the profile of protection.
In terms of the products themselves, I will focus on their IP plan because this should be the priority protection purchase.
Most eye-catchingly, PruProtect has taken the step of offering a financial underwriting guarantee so the client can ‘fix’ the amount they would receive at claim by providing financial evidence with their application. This is a great move and an option that we are the only other provider to offer. In my view, anything that can be done to reassure the consumer and make their life easier has to be a good thing.
Following the IP Task Force’s latest White Paper launch, we have seen a desire by providers to produce products that the general public can relate to.
PruProtect has looked at the current working demographic and have extended their cover to age 70, which is great, but I would also like to see day one cover. We provide this option and it is mostly taken up by self-employed people who tend to feel the pinch much sooner than those who may receive some form of cover from their employer.
I am pleased to see the PruProtect stepping into the IP market because anything that encourages people to protect their income in this unstable economic climate has to be embraced. I would expect to see many more providers follow in ours, and PruProtect’s, footsteps over the coming months.
Roy McLoughlin, Master Adviser
PruProtect’s new product is a welcome addition to a market that is crying out for innovation. When first introduced to it, one feels that a heavy amount of adviser influence has helped shape its design. This is vital as it is the IFAs who uniquely experience ‘real life’ clients and I have always found it absurd that they are not consulted in the construction of innovative plans, i.e. we can tell you what will work and what will not.
Own occupation for example is crucial as clients are extremely suspicious of the alternatives. PruProtect have listened to this.
The ability to talk to an underwriter or, the lack of, drives IFAs mad. PruProtect has listened to this as well.
Financial underwriting at claim is very difficult for particularly self-employed clients to relate to. PruProtect has listened to this too.
The ability to demonstrate to a client how exposed they would be by using an online calculator is an extremely vital sales tool. PruProtect have listened again!
Finally, the HIV changes are a completely radical move and hopefully are the first step of many to building bridges and breaking down barriers with communities who feel completely alienated with the insurance industry.
Someone has, unfortunately, already used the phrase ‘the listening bank’ but products such as this and, hopefully, others to follow from the competition can only bring the relationship between the distributor and the manufacturer much closer than it has previously been.
