This is the final post in our series collecting the great conversations from our June Protection Forum. In this section, attendees discussed PMI, helping advisers sell protection, and putting the focus on rehab and value-added services.

We’ve already got lots of different types of products, and having more versions or hybrid products will just make things more confusing. I think IP should consider treatment or other actions that reduce potential claims as part of claims management.

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Ian Sawyer:

Well, as you know, we do quite a fair few PMI sales and there’s been a few diagnostic products, but they sell in very, very small numbers because people’s expectations is that “once I get diagnosed, then I’m really focused on the diagnosis because the waiting is often the worst to find out and then I want the treatment.” And then if the NHS, especially now, is not in a position to do that treatment, and some reports say that we can face ten a ten million waiting list in some ways, I think that would be problematic.

My other point with regards to hybrid products, whilst I get the theory and the theory is sound, in reality, we already have a myriad of different names of products and different types of cover, and the consumers don’t understand them as it is. We’ve got life insurance, we got critical illness cover, we got serious illness cover. We got Key 3 cover. We’ve got health insurance, we’ve got medical insurance, we’ve got accidents, sickness insurance, we’ve got income protection, we’ve got mortgage payment protection, et cetera, et cetera. Having yet another version is going to muddy the waters greatly.

What I think IP insurers should be focused on is if the treatment or any action is going to reduce potential claims then they should be considering that as a part of their claims management. And also, if it is proven that those with PMI who will get faster treatment and a faster diagnosis, those with PMI are therefore potentially a better risk for IP, then why not give them a discount and encourage them to have their PMI covered as well?

I consider PMI the fourth type of protection. This is another opportunity for signposting and partnerships across the community. We need to change IP so it’s fit for purpose for people who have multiple jobs and how people will work going forwards.

Roy McLoughlin:

I’ve always called PMI the fourth protection insurance for years anyway, and when I go and meet clients, I always say that there are four types of protection you can have. But Ian is spot-on, most people don’t understand the differences and therefore it’s really important we present them as a complete solution. The amount of people I’ve met over the years that got PMI who think they’re going to get a pay-out if they have a critical illness, because it’s just basically not been explained to them properly, shutter me. And vice versa it happens as well.

But I think this is yet again a great application for signposting, because I think this is another example of where, and Ian is unusual because he does them all, but where the protection guys should talk to the PMI guys and vice versa and create partnerships with people across the industry so that you can give your clients a comprehensive solution to the whole thing. So I think this is yet another signposting thing. And also, I’ll just jump in and totally agree with what you said, Rob. We need to change IP and make it fit for purpose for people that have got multiple jobs. All the research is telling us going forward that people are going to start having different types of jobs.

And I think many of us advisers are just a bit worried that this isn’t being addressed quick enough and we need to retain the faith in the product. Yes, the sales went down slightly last week with Swiss Re, but I think that can be explained away by they want cover going, but we’re on an upward trajectory here. IP is in a very, very good place. But I think we need to adapt to how people are going to work going forward. And there’s no doubt that particularly, remember, it’s still five and a half million people on furlough, particularly post furlough.

The way people are going to work and the way they’re going to be employed is going to be different. And although the PDG and the IP tab are both for both looking to this at the moment, as many of you on the call to be aware of, we’ve got to get this self-employed situation right so that when people have fluctuating earnings and they don’t have to be self-employed, obviously, but when they have fluctuating earnings, they have absolute surety and faith in the fact that the product is going to adapt with them.

We’ve managed to help a lot of traditional advisers sell private medical insurance. Complexity is something that is often pointed at as an issue, but that’s also where the adviser comes in.

Andy Philo:

I was just going to mention that pretty early on in our evolution in the U.K., we did launch a hybrid type role offering sort of a health and a life product. It wasn’t specifically IP product, but it didn’t really sell. And I think it probably was too early for us really in terms of the market. But it was the cost really and the complexity at that particular time that turned some advisers off.

So what we’ve done is we’ve offered I mean, Andy mentioned it earlier, on sort of a referral type model. But what we’ve successfully done is we’ve managed to convert a lot of traditional sort of advisers into selling private medical insurance. And it’s now our second biggest channel on the health side in terms of a traditional, whatever that means, financial adviser now either referring or selling private medical insurance.

I think the complexity piece is obviously something that gets labelled, particularly at Vitality quite a bit. But I do think I mean, we try not to be complex just for complex sake. But I do think that’s where the adviser really does add value and so, I want to be clear, this is not about us adding complexity just to make it harder for everyone. But this is what differentiates, the adviser, I think, from just going online and a client self-service. And so I really like Roy’s idea of it being the fourth type of product and bundling it in. But, I think there’s definitely a space for it. I think we were a little bit too early, really, in our thinking, and probably the market wasn’t ready for it as well.

It’s not just about giving a claimant money but helping them get back to work.

Emma Thomson: I think one of the things that certainly came out of Seven Families was the importance of rehab, its not just about giving a claimant money. It’s actually about trying to do whatever you can to get them back into work. And I think the insurers, a lot of them obviously do great work when it comes to rehab as shown by the Seven Families campaign, but it’s not really clear, is not really outlined in the T&Cs, its not really outlined clearly in sales aides to help advisers talk about what is actually on offer. It’s kind of all a bit wishy-washy, “we’ll do it on a case by case basis.” And I just think if that message was really stronger, then I think it would certainly help advisers and clients understand the importance of IP and actually what might happen at claims stage in addition to actually just receiving the money.

Clinicians are actually wondering why insurers never ask them for case studies on the benefits of rehab. Recent studies show that a third of unplanned retirement in the UK is a result of health issues and acquired disability and another 8% is having to give up work to care for a partner, which really makes the case for IP as part of an investment portfolio for accumulating funds for retirement.

Johnny Timpson: Just to pick up on a couple of points that idea that Ian, Roy, Emma and Andy made, actually maybe build on some of those. But if I turn to the point about rehab. I wear a hat because I’m an adviser to the Association of Vocational Rehabilitation Association UK, which are all the clinicians actually, that the insurance company pays to rehabilitate their policyholders. And the VRA colleagues that I have, they’re always scratching their heads saying, “well, why do the insurers never ask us for case studies to talk about the benefits of rehab?” So the clinicians are there ready to share what they are doing. I think we’re not really making enough of it in the UK. Interestingly, it’s a big deal in the US actually they really do tell the rehab story and they provide videos and things through Life Happens to educate the consumers. Maybe just picking up on Roy’s point, actually a bit about signposting. I’ve been doing some work actually in the wealth space currently both in the UK and the US. And one thing is very interesting and just produced some very interesting data about two weeks ago, highlighting that a third of unplanned retirement in the UK is a result of health issues and disability– acquired disability. Another 8% of unplanned early retirement is due to having to give up work to care for a partner. And that kind of does make the case for having IP almost as like part of an investment portfolio, as an underpin for customers and clients that are in the accumulation stage, accumulating funds for retirement. Because frankly, I also check with the guys that actually produce the cashflow modelling for wealth advisers and asked the question “how many of those wealth cashflow models include the fact that one in eight people will drop out of workplace pre-state retirement age on health grounds?” Out of the last hundred, it was eight of them. So the wealth guys are not really engaging enough I don’t think on the risk side. Great advice, in terms of investment and accumulation. But what about the one in eight? They aren’t going to get retirement age. What’s going to underpin their lifestyle and their provision for later life? IP is the solution. And I think we need to engage them about signposting and commenting. But if I just turn to Andy and given his expertise, in the mortgage marketplace, I was intrigued last week actually that both the UK finance the trade body for banks and the Building Societies Association called it to government, that the support for mortgage interest benefit, that’s the benefit that pays interest. It’s a loan scheme that actually, if you can’t fund it, isn’t fit for purpose. I was intrigued, actually, that the lenders are prepared to make a big stink over the government’s mortgage safety net not working yet, we’re not seeing enough of them, I don’t think, in terms of introducing mortgage protection to advisers prepared to have that kind of appropriate conversation with clients. Maybe there’s more to do, I think, engaging lenders around before you start making a case with government, maybe think about your client protection needs and addressing them first and foremost.

The two steps to me are creating the material for advisers to use that they actually need, and then figuring out how to make sure they use it.

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Setul Mehta: I think the IPTF are working on this as well, but actually there’s two steps to this for me. There’s one in creating the material, whatever we think it should look like, that advisers will use, and the second one is then actually getting the advisers or are advisers going to use it? What do advisers want over and above just the case study to enable them to use? Because I think my take away from the first session, in a wider industry context is there’s lots of material out there that people aren’t using it, and we don’t find that as much. So if I break into the two bits, its what material, is out there? And then what’s the next bit to make sure people are using it? Because is it as simple as, “actually I don’t have a way to be able to connect it into my social media because I don’t know how? Or can it be in a website friendly version? Or how does it work?” I think it’s a bit of both, really.

It’s our responsibility in the industry to tell the stories, and we should be telling more stories about the benefits of value-added services. Journalists have started to change their view on insurance and are much more open to positive stories.

Roy McLoughlin: I know we said this before, but just remember everyone that Seven Families, has no intellectual property so anybody can share that on any site that they want. Just as a as an FYI. Couple of things here, I think we’re all culpable, advisers when we have live stories should try and encourage our customers as much as we can to tell those stories out loud. You’ll be aware that I’ve certainly done it with a couple of people. And I think that’s part of the responsibility of being an adviser, actually. My plea to insurers, obviously, is exactly the same thing. I know it’s not always simple, okay. But sometimes I think it’s the way that it’s asked might actually be the situation. And there’s several insurers on this call that over the years have told some absolutely fantastic stories. I remember the one years ago, with LV= for example, with a motorbike guide. But there’s many more who have told these stories– keep telling them. And what I can promise you, you all know this, is that the journalists have completely changed their view on this. They are desperate for these stories and they are desperate for good news stories. The journalistic attitude towards income protection has changed so dramatically that some of us that are slightly older on this call will be will be nodding, I’m sure. But, you know, they will say, “come on, give us these stories. We’ll put them on the national press.” And I think that’s what we got to do. So this is not… I think we’re all culpable. We’ve all got a responsibility. I think sometimes it’s the way you ask. And the final point I’d make is I recently read a brilliant story in Cover. And I rang up Christine and said, “look, what a fantastic story, etc cetera. Who was the insurer? Because I think it’s good to tell out loud.” And she wasn’t able to release the insurer, I get that, went back and spoke to that insurer and they said, “we don’t want to tell the story.” So sometimes when it comes to value added services, I think, to an earlier point, we should be telling those stories because whoever said it earlier, but a lot of people will be able to relate to that sort of stuff as much as to the actual claims. So, you know, I just think tell these stories. Seven Families proved that it works.