Justin Taurog, Managing Director, VitalityLife
For most insurers, risk is still assessed at the outset of a policy and treated as static. Clients only tend to interact with their insurer when something bad happens, and the individual, changing needs of a customer are largely ignored over time.
Given the complex world we live in today, this approach is no longer enough. If the industry is to grow the protection market - and ensure cover stays in place long-term - products need to move with a client, as well as with the times.
More than ever, protection can play an increasing role in tackling wider issues impacting society today by easing the healthcare burden in the UK. This can also allow protection to become embedded into everyday life. At Vitality, we've seen first-hand how daily interactions that incentivise and reward healthy behaviour not only improve the lives of our members and deliver tangible value. They generate newfound levels of engagement, and this improves persistency.
Those who are highly engaged with the Vitality Programme are, on average, almost 60% less likely to cancel or lapse their plan.Justin Taurog, Managing Director
Not only that. If a client is regularly interacting with their plan through multiple touchpoints - that are genuinely meaningful to them - they are much more likely to value the plan, over and above the core protection cover. When this involves positive lifestyle choices, they are also more likely to stay healthy.
Alongside the obvious benefits of this to a client, regular interaction also helps to foster stronger relationships, not only between them and their insurer, but also with their adviser. This leads to additional opportunities and repeat business as well as client referrals.
Relevant cover at every stage of a client's life
As we do move away from a transactional approach to insurance, there is an opportunity for protection to move with the changing needs of a client, so it remains relevant.
This is crucial, considering the always-changing economic, health and wellbeing challenges clients face.
Take advances in medical science for instance. People are today much more likely to survive illnesses that in the past would have been fatal. More, meanwhile, are going on to develop secondary conditions.
That's why, when it comes to providing cover for serious illnesses, protection is far more fitting if it gives clients the ability to claim multiple times. Or continue their cover beyond its term into later life, given that there is growing public awareness around the need to fund social care costs.
To remain relevant, Income Protection, meanwhile, must flex to the needs of clients. And do more than just pay out in the event of the client falling ill and offer little or no value beyond that. Instead, it can serve to drive better outcomes for individual clients and society in general, by supporting healthy living - from illness prevention to better productivity to rehabilitation through recovery pathways at the point of claim, alongside genuine lifestyle benefits.
Furthermore, with Consumer Duty on the horizon, an emphasis on good client outcomes and delivering fair value is only going to take on growing importance from a regulatory and compliance standpoint as propositions continue to evolve in this way.
This is the next generation of insurance…
We ultimately see the development and continued enhancement of relevant and timely protection products - that live and breathe with a customer - as the next generation of insurance.
We believe this gives advisers a unique opportunity to support a client at every stage of their life - from enhancing their lifestyle while they are healthy to supporting them fully when they are not, into later life and beyond. Because engaging with clients in this way is good for all involved, our Shared Value approach to insurance is getting increasingly difficult to ignore.
Find out more about next generation insurance here.
This is article is sponsored by Vitality.
