British Friendly's Mark Myers calls for the protection industry to show greater transparency and togetherness by timetabling the release of claims stats.
I noted the results of Drewberry Insurance's Protection Consumer Survey last month with a great deal of interest.
One of the headline results highlighted that only 7% of the approximately 2000 consumers surveyed had an Income Protection policy and yet 25% owned pet insurance.
So people can and do engage with the idea of insurance, but not with the idea of their own health and salary. So Snoopy is covered for an eye infection, but if Charlie Brown's parents take a turn for the worse and can't work, they all suffer!
It is often said that we are a nation of animal lovers, but that explanation doesn't seem adequate. So why does this imbalance occur?
The survey shows that there is a great deal of distrust in insurers - only 19% of people trust insurers most when buying financial products. This lack of faith, I would suggest, may be in part down to the number of claims the public think we as an industry decline.
According to the survey, people believe life insurers pay out only 50% of claims. The question was asked about life cover rather than income protection, but the message was clear.
The public don't know that we deliver on our promises. As we all know, the real figure for life insurance pay outs is around 99%, while Income Protection is over 90% (and over 96% for British Friendly in 2014).
If anyone still doubts the validity of the decision to publish claim stats we should not forget the central reason why it became necessary. The public don't believe we pay the majority of claims and the only way to show that we do is to publish the proof every year. It takes time but the message will slowly get through.
Trust was not the only issue. Perceived costliness of an income protection policy (even though the cost is roughly equivalent to a pet insurance policy) and the mirage-like safety net of sick pay and state benefits also ranked high as reasons to neglect protection.
The 7Families campaign has started very brightly in raising the profile of financial vulnerability but, as insurers, we all have a duty to make sure our own house is in order and stands up to scrutiny.
At British Friendly, we publish our annual paid claims information in January every year and next January we will also be publishing our ten year paid claims information too. We know that advisers value this kind of transparency and so do the public.
It should be basic across protection and I would like to see this timetabled claims reporting become a basic requirement. After all, insurers collect this information throughout the year so why does it take so long to publish?
Despite a lot of grumbling every insurers publishes their claims data now but I sense some would like to turn back time if they could. We should not let them.
We have made progress and the industry is in a much better place than it was 5 years ago. We must ensure that the good work that campaigns like 7 Families is doing in changing consumer perceptions is not wasted by short term interests.
Maybe in a couple more years we'll start to see Drewberry's survey results reflect the positive effects of this increasing openness.
Mark Myers is CEO of British Friendly
