Phil Jeynes is responding to the report and independent research published by advice firm LifeSearch last month about the quality of non-advised protection sales.
According to Swiss Re’s 2021 Term and Health Watch, 50% of new term assurance business is now sold without advice.
Some within our industry would have you believe this is bad news but I disagree. In fairness, as an employee of a non-advised life insurance broker that’s unlikely to surprise you.
However, I have been a vocal and committed supporter of this market for longer than I’d care to count, while working for a variety of high-profile firms across a range of different business models.
Fundamentally, I care about protecting people and believe in delivering the right outcomes for customers.
The fact is, as the same report from Swiss Re outlines, our market was down by 1.2% in 2020 – a year in which a global pandemic struck, causing everyone in the country to consider their own mortality on a daily basis.
Any sector which is adding genuine new business to an otherwise shrinking pot can be seen as nothing other than integral.
Two of the largest insurers in the country agree.
Legal & General and AIG Life are both on record as regarding sales by Reassured as good quality and indeed both actively sought to become and are part of our non-advised panel in demonstration of that position.
They don’t support all non-advised brokers, just as they don’t give agencies to every advice firm which requests one.
Quality is measured across a range of metrics and each is judged on its merits.
IP needs refinement
There are of course differences in the outputs of non-advised businesses versus their advised counterparts; hardly surprising given a product set designed over many years of dominance by the latter.
Income protection is a great example of a brilliant product which needs refinement to reach the mass market it deserves and remains, currently, difficult to fit into a non-advised process.
In truth, you could argue that income protection is even too complex for the advice sector, given its sales fell by nearly 10% in 2020 from an already low base of well under 200,000 policies per annum.
If firms in the protection market want to avoid their own version of the Kodak or Blockbuster Video moment, they must move away from an old fashioned, patronising view of customer needs.
Just as Netflix delivered what the public wanted in terms of convenient, on demand streaming of entertainment content and mobile phone manufacturers removed the need for people to carry cameras, protection sellers must look to what the market tells them and adjust to meet its demands.
Broad appeal for protection
There will always be a place for financial advice.
Rather than being evangelical about one methodology or another, we should seek to build businesses which are capable of serving the widest customer base possible.
The good news is that life insurance has as very broad potential appeal; from young families guarding against catastrophe, to those in their twilight years providing for the cost of their funeral and everyone in between.
Similarly, although there is always more to be done, most customers are eligible for cover and the vast majority can get a positive decision from an insurer at point of sale.
There is ample opportunity in this market and we should enthusiastically look at ways to embrace its modernisation, not mourn the passing of the way it used to be done.
Any debate about which route is best for the customer will soon be redundant as the modern protection broker focusses on the larger issue: protecting as many lives as possible and ensuring customers can access that cover in whichever way they choose.