Do you think that the introduction of Bright Grey's new cut-down CI policy, set to be sold exclusively online, will impact customers that would previously have visited an IFA? Is this the shape of things to come?
Aidan Dewhurst, Royal Liver
Consumers are growing in confidence when it comes to online purchases, so it is only natural that protection providers are starting to look increasingly at this. But, in an attempt to make products more accessible to the general public, we should not lose sight of what is right and appropriate for the customer and their needs.
What is noticeable with financial protection is that the devil often tends to be in the detail and an IFA can add value to the process. A bit of insight goes a long way and, by matching together needs and benefits, a structured professional approach can make all the difference to the overall process. I suppose the danger with any direct proposition is that the element of advice may be lost and consumers may not have the right considerations that they need when purchasing a product. This can lead to them taking out unnecessary cover or leaving themselves with gaps that they are unaware of.
Personally, I am all for innovation and it is good to see more protection providers recognising changes in the market with bespoke propositions. My only observation would be that if online propositions are to evolve successfully, they need to be simple, transparent and, wherever possible, incorporate advice. With this approach, they may help to broaden the scope of the market along with beginning to chip away at the ever-present protection gap.
Ian Williams, Cavendish Online
The answer to the above question is about choice. We are seeing more and more clients who wish to chose their products based on price, and would rather not have anything added that will increase the cost.
Far from discouraging the use of advisers, we see this type of simplified policy making critical illness (CI) cover more accessible for these clients. They would previously not have considered CI as an option, on the basis that it is too expensive and these are often the clients who would not visit an IFA for the same reason.
In the current economic climate, people are feeling the need to make cutbacks in their household expenditure. It is often protection and insurance products that are the first to go due to the comparative immediacy of other priorities. This can be disastrous as it is exactly at these times that protection is needed most.
We see this type of simplified, cheaper product increasing not only the amount of cover people can have, but also the variety of eventualities they can cover, while still remaining within a budget.
We believe that consumers should be given the choice to select their products based on price as well as service and make their own decision regarding the level of help and advice they need.
As customers can obtain any product information that they require from the provider prior to purchase and may have gained experience in financial services themselves, they should be able, and hopefully willing, to choose their route to purchase any kind of financial product.
Dale Tranter, Sesame
At first glance it may appear that Bright Grey is using this product to compete with IFAs, but this is not really the case, at least regarding CI cover.
Firstly, this product is inferior to the menu product distributed via advisers. On CI, for example, only 23 conditions are covered (as opposed to 35) and there are no ABI definition enhancements, no waiver and no joint life reinstatement or separation options. On term assurance (which may be where any conflicts with IFAs arise), the maximum term and entry ages are more restrictive.
Secondly, while the product is initially only available via a consumer-facing website, the intention is that it will ultimately be available via IFA websites. So, any customers accessing it that way without seeking advice can do so via a process that may still bring some reward for IFAs. Obviously whether those customers not wishing to engage with IFAs will be browsing IFA websites initially remains to be seen, but at least the potential is there.
So, while Bright Grey has widened its distribution channels, given that other providers have been distributing protection products via supermarkets and other third parties for some years, we should – particularly in the current climate – respect Bright Grey’s right to seek business where it can, at least via a market segment that is IFA-unfriendly anyway. Whether critical illness in particular should be sold on a non-advised basis is debatable, but if direct consumers are demanding it, then you cannot blame Bright Grey for trying to meet that demand.
Robert Higginbotham, Contact Insurance
I would have to say that the short answer to the above question is ‘yes’.
The internet is changing the way we all do business, and life and CI insurance are not outside the realms of this sea-change in purchasing.
Information is much more easily available today through the web and by increasingly internet savvy consumers who are taking the time to research and read through policy documentation before making an informed decision about which policy or product they think would best suit their needs and budgets. These same customers could certainly make many savings by opting out of going for, and receiving, professional financial advice from fully qualified advisers.
At present, Contact Insurance facilitates a non-advised, non-investment sale so we see ourselves adding value by giving concise, accurate information to customers and helping their application go through all stages of underwriting as smoothly and quickly as possible.
We show insurance premiums to all the visitors that come to our website so that these potential consumers can make accurate and proper comparisons based on the information they have entered. However, we would always speak to them first before proceeding with an application. For starters, we do it to make sure that they understand what the scope of a policy is. And, secondly, we do it to check that they have entered accurate information.
People are looking to save time and money and, increasingly, we see internet technologies enabling them to this end.
