Critical illness is suffering from an identity crisis, with consumer trust lacking, according to Paul Roberts, proposition and distribution director at CIExpert.
Referring to findings from the CI Expert’s Critical Thinking 2024 report, he said: “The insights contained within the critical thinking report demonstrate very clear proof that critical illness cover suffers from an identity crisis – misunderstood, undersold, and underbought.”
Roberts (pictured) was speaking at ProtectX8, an online event featuring seven speakers giving seven-minute talks on the topic of ‘The Humanity of Protection – Trust’.
“So what do we need to do next?” he asked.
“We need to talk about trust with our consumers, clients, policyholders – the everyday person who wants to protect themselves, their families, and their businesses.
“Trust them to tell us about the products they want for the future. What benefits would they like included, the added-value services they’d like to access, how they’d like to be kept informed of the benefits they have and how they’d like to buy them in the future.
“It’s not for us in the industry to make those decisions for them.
“It’s the trust we have in our consumers that will help us all inspire the innovation and protection products they need.
“Without that trust from today’s consumers, we will all fail to give them trust in the protection plans of tomorrow.”
CIExpert appointed Paul Roberts as propositions and distribution director in June 2022 after he had worked on a consulting basis with the comparison service since December 2020.
Ancient history
Roberts also spoke about the history of critical illness and the importance of trust.
“Trust is the principal doctrine that governs all insurance contracts,” he noted.
“All parties to an insurance contract – the person taking out the cover, any involved adviser, the source of information used by the buyer for decision-making, the insurance company itself, and more recently, the various research platforms used by advisers – must all operate with the utmost good faith,” he said.
Roberts traced the beginnings of life insurance from its early beginnings to the eventual beginning of critical illness almost 2,000 years later.
“When I joined Guardian Royal Exchange in Cardiff in 1986, life insurance had been around for over 2,000 years.”
“The first documented life insurance policy in England dates back to 18th June, 1583.”
“Income protection emerged in industrial Britain during the late 1800s.”
“But critical illness insurance was a relatively new concept in 1986.”
“Critical illness plans then meandered along for a while, paying the full amount of cover only for a claim on a relatively small number of conditions, especially compared to today. And when that claim was paid, the plan would stop.”
CI conditions race
But that all changed on the 3rd of July 2003 when something quite radical happened and Skandia became the first insurer to introduce additional payments for low-grade breast and prostate cancer.
“These additional payments paid the lower of £10,000 or 25% of the cover level at the time,” Roberts said.
“But if the claim on those two conditions was paid, the main plan itself continued.
“That small change started a great CI conditions race, which over the next 20 years or so, dramatically changed critical illness products beyond recognition.”
The processing of new information on the various products by advisers could take hours and even days, without the assurance that there would be a sale. But this changed in 2012 with the advent of the first critical illness comparison site.
“This research and much, much more can now be done in a matter of seconds,” Roberts continued.
That has entailed putting a lot of trust into these research platforms, but consumer trust is lacking, he said.
