2020 saw some interesting developments on the product front with product simplification and the recognition of the true benefits of Added Value Services at the forefront. In our final ‘look ahead’ article this week we are delighted to share the views of some of the top product and proposition people at key insurers on what they see as the key themes for product development in 2021.
At AIG Life we are proud of the way our propositions have a positive impact on our customers’ lives. In a year where Smart Health gave our customers remote GP services on demand through successive lockdowns, the importance of having access to tools to support health and wellbeing are becoming increasingly valued. In 2021 we anticipate increasing numbers of people seeking support for mental health challenges.
Combine this with providers like AIG Life simplifying critical illness cover which builds on impact rather than definition, we’re developing propositions to keep step with advances in medicine and treatments. And with the support of Best Doctors to get a second opinion on diagnosis and treatment after a critical illness claim, it’s difficult to see a protection future without integrated telehealth solutions.
As always, we’ll keep listening to our advisers and work to make sure our propositions continue to meet the needs of their clients. Forums such as Protection Guru’s are a great mechanism to assist that. Meanwhile, there are a few key things that are front of mind:
- Digital channels have been playing an ever increasing role in our daily lives, but the rate of acceleration due to COVID has been staggering. Homeworking, remote client meetings and online document storage all mean digital ease will be a major theme that continues at pace. We will continue to invest in this space.
- When it comes to economic impact, and with the furlough scheme extended well into 2021, we are ultimately likely to see new SME businesses springing up, possibly replacing those that have or will succumb to the tough environment. We think there will be new and significant opportunities in the business protection market.
- The public debt mountain is enormous and with a trend of rising receipts of inheritance tax, wealth management and estate planning will be as important as ever. The role of protection products and associated services such as My Digi Executor which is included in our new Aviva Digicare+ App should be an area of ongoing focus.
After a difficult year, we’re all hoping for a recovery or bounce back in the market in 2021 and the opportunities this could bring.
In 2020 we launched new income protection products into the less well served customer sectors and we’re very pleased with how the market has received them. We don’t believe as an industry that nearly enough people are having informed conversations about the benefit of income protection. This was highlighted in our Deadline to the breadline research; when people plan their financial reliance on myths and misconceptions, they don’t always see the need. By making our proposition for Income Protection much wider we are allowing advisers to personalise their advice for their clients to suit not only their needs but budget and situation. The product should fit the client not the other way around. Growing this market will continue to be a key focus for us in 2021, expect more developments to come.
The COVID-19 pandemic has changed our lives, relationships and our attitudes. It will have long lasting and far reaching consequences for our future work and wellbeing; ‘normality’, whenever we return to that, will be quite different. In recent years, protection propositions have become more extensive and more comprehensive (just how many conditions, variants and levels of severity do CI plans cover now?). Yet there is a rising demand for ‘simplicity’ and – we can’t ignore it – we still suffer from an over-obsession with the lowest price.
Consumers lead diverse and complex lives and, as has been demonstrated though the pandemic, these can frequently change. In that vein, we foresee ‘relevance’ as a key emerging theme in future proposition (it’s not just ‘product’) development:
Greater relevance in design and presentation – more ‘tailoring’ with core features, simple switch on/off benefits and journeys that are geared around the needs of the customer cohort. Recent examples have included adding/removing children’s CI cover and the framing of IP for renters. Might 2021 finally see a bright provider design an IP proposition specifically tailored for (7million+) working adults with fluctuating earnings?
Greater relevance from day one – protection is no longer just about the moment of truth. Protecting people against risk and preserving their overall welling, starts from day one. Added value benefits can be just as important as the core insurance payout. We can expect contemporary protection to be more engaging with relevant daily benefits, which offer smarter access to experts, services and support to help our customers handle everyday life challenges.
Greater relevance as our customers’ lives change. Think about it, we still write policies for 20 to 25 years, or for longer – but what changes will occur over that period? Product development will place more emphasis on adaptability and flexibility for it to remain relevant throughout the policy term. Perhaps payment breaks will become the norm, there’s room for more relevant GIOs and, along the lines of the LV= CI junior option, we might witness more intergenerational options to ‘pass on’ the benefits of financial protection to younger (and older) generations?
Greater relevance for the distributor and channel. This will be key in extending transforming access to protection. We foresee more tailoring of protection packages designed with stronger connectivity between the provider, distributor and their customer. Full holistic advice might be the gold standard, but not everyone wants it. At times our desire to attain customer outcome perfection means we can be our own worst enemy. Some cover is better than none – and simple, relevant products certainly have a role to play.
In terms of outlook for 2021, our belief is advisers will increasingly use Menu products to tailor solutions for clients. By flexing the amount of different cover types to suit a budget and to closely fit their needs, clients will be better protected and more likely to benefit from payouts – e.g. from loss of income. As a result, we anticipate product development from providers to be centred around making Menu propositions as flexible as possible and adding new functionality to help advisers meet different needs. In addition, we’d expect further progress in value added benefits, embracing the new support solutions that technology enables. We’d predict innovation in Business Protection, helping advisers benefit from this growing part of the market; and further innovation in the Trust or Nominated Beneficiary space to give clients peace of mind that payouts on death will go quickly to the right recipients.
My hope for 2021 is that the industry continues the move towards simplification of critical illness products and there are even more innovative ways to help customers truly understand what they are covered for.
Covid-19 has brought to the fore how important it is to work on improving our wellbeing by leading a healthier lifestyle. It has placed an uncomfortable spotlight on our personal health and lifestyle risks, causing many in the UK – and no doubt globally – to reflect on their own vulnerability and mortality. With this in mind, now seems to be an excellent time for us all to drive awareness of the benefits of taking personal responsibility for health management and help more customers understand how important Protection is for them and their families.
Providers will need to demonstrate both quality of product offerings as well as value to both advisers and clients. I think there will be a continued focus on added-value services on insurance plans and clients will be looking for more immediate value from their insurance policies not just in claim. If we can deliver real tangible value to them without the need to claim or reducing the likelihood of claim then clients will value the advice and the products they hold. Having a protection policy shouldn’t solely be about the fear of making a claim.
2020 was the year in which providers took to simplifying their product ranges and I think this will continue into 2021. The importance and value of advice will remain but the threat of online, buy now functionality and products that facilitate this is also expected to grow.
The use of technology will continue to advance and those advisers that embrace it will benefit most. I expect to see more insurers enhancing on-line capabilities allowing both advisers and clients to be able to make changes to their products online without the need to cancel and re-write them. This improved efficiency and product persistency will be good for the consumer.
One thing the pandemic has highlighted, if we didn’t know already, is how life can change suddenly, and I think we’ll see an even greater focus on flexibility within contracts. I like to think our own contracts have a lot of inbuilt options.
There is a self-service option for advisers to make instant changes to policies at any time – they can add or take away benefits, increase or decrease cover, extend the term of the plan, switch between variants, access all documentation and add trusts on-line, change smoker status, and this flexibility has proved its worth in the current Covid environment.
Advisers can delegate online underwriting to the client (also helpful in a socially distanced world).
All that said, there is more we can do here. Across the industry, companies have found ways to help customers in financial difficulties, and from our own perspective, we will focus on ensuring we can help advisers manage, keep and grow policies throughout the term, in a way that reflects the fact our lives constantly change.
More broadly, there will be a growing focus on prevention and helping customers to live healthier lives, a concept I think more and more customers are willing to embrace.
It’s really interesting to see some common themes that providers are predicting for 2021, technology, product flexibility and an increased focus on ill-health prevention and healthier lives. The increasing use of technology to support the customer experience, driven by necessity in 2020, now seems to be a one way street. Bringing more services online, such as the ability to make product changes, will make a huge difference to the customer and adviser experience and help maintain valuable cover relevant to changing customer needs. As I sit here summarising this, I’m conscious I’ve again missed out on the ‘unseen’ exercise that the pre‑Covid commute used to bring and the fact that providers see a growing focus on health awareness, illness prevention and helping customers to live healthier lives has to be a good thing.
I hope you’ve found this mini-series of look-ahead articles interesting and inspiring. If there’s anything you would like us to cover in future insights, just get in touch.