Real Life Cover: why it’s needed and what it is.
Some background
Let’s just put some figures on the inertia afflicting the life protection industry.
According to Swiss Re’s Insurance Report 2005, the protection gap is not only huge, but still growing, currently standing at some £2.3 trillion sum assured and £170 billion annual income protection benefit. And all the while, new business is not only stagnant, but shrinking.
Swiss Re also points out that this is testimony to our industry’s failure to seek out new customers who may have no cover at all, as well as a demonstration of the ‘huge opportunity out there for anyone who can get the proposition right’.
Many other indicators tell the same story. For example, the sustainable home-ownership initiative, launched in 1997, had an original target for Mortgage Payment Protection Insurance (MPPI) take-up of 55% of new mortgages, but actual MPPI sales have steadily fallen to 24% in the second half of 2005. Derisory income protection sales paint a similar picture. While our customers ’spend now, worry later’, we’re busy tinkering when it comes to putting them at the heart of what we do. No other industry has made so little progress in this regard.
At LifeSearch we’ve driven listeners to madness about the crying need for change: the excessive number of potentially inappropriate sales; the value of advice being eroded; and the unacceptable fact that real customer risks are not being addressed through the current sales mix.
But it doesn’t have to be this way. Real Life Cover has addressed these issues, put the customer first and, in doing so, will enable our market to grow.
Amidst the problems, there’s still a lot we can learn. So to build a new and successful solution, we started with some axioms:
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