Growing the income protection market (and everything else we covered last week)
Last week marked the second Income Protection Awareness Week, organised by the IPTF and featuring a range of content and voices from across the industry, aimed at trying to grow the income protection market and ensure more advisers and clients are aware of the importance of IP. There’s arguably never been a more important time to be focusing on IP, with many households more financially precarious and less resilient than ever before, the impact of a loss of income through ill health is likely to be catastrophic for millions of people. There’s a high possibility as well, that over the coming years we’ll start to see spending cuts from the government, which could impact the provision of state support.
We regularly hear from some in the government that despite the challenging economic outlook, one positive is that unemployment is at a record low. As we reported last week though in Amanda Newman-Smith’s article ‘Why latest employment data is the perfect conversation starter for income protection’, these figures mask the fact that more people than ever are now out of work and not seeking employment due to ill health. Without the financial safety net of protection insurance, the financial outlook for many of those is dire.
Many in the industry are also no doubt concerned that with inflation soaring, now at a 40 year high, and costs rising, there’s a very real risk that many clients may regard protection insurance as an unnecessary luxury and cancel their cover. Fortunately, from what we’re hearing at the moment this doesn’t seem to be materialising as badly as some may fear, but the current economic conditions are likely to last for some time. We need to do everything we can therefore to positively engage with both existing and new clients, if we’re to grow the market and ensure more people are protected.
As was pointed out last week, increasing awareness of income protection requires an effort from across the whole industry, involving insurers and advisers. Increasingly, advisers are using new and innovative ways of engaging with consumers through social media platforms and other marketing channels, which can have a big impact. There is a risk though that if the industry doesn’t do more to reach consumers, particularly younger or underserved markets, someone else will.
Ian covered a recent interesting development in the UK general insurance market last week, with the news that Amazon is launching a UK home insurance comparison service. Ian’s insight highlighted that this should be seen as both a warning and opportunity for advisers. Given the power and reach of Amazon and it’s ability to effectively target consumers, it’s not hard to see how disruptive they could be if they entered the protection market.
As well as reaching more consumers and growing the market, we need to also ensure we can offer the right products and solutions, particularly important when it comes to income protection. Last week we showcased two specialist types of income protection cover, examining non-financially underwritten income protection for clients with unstable earnings and executive income protection for business owners. Given the changing working practises and lifestyles of many UK workers (indeed, record low unemployment also masks the number of people in the gig economy, with many of the problems that brings), we need to consider whether the fundamental design of income protection needs to change.
This is something we’ll be discussing in our upcoming November Protection Forum, which is taking place on Tuesday 8th November, at 12:00pm. We’ll be specifically focusing on whether income protection products need to change in light of the new consumer duty regulations and look forward to welcoming many advisers on the call, to hear your thoughts. Sign up to attend here.
Last week we also marked World Menopause Day, with an insight from Amanda Newman-Smith examining what more the protection industry can do to support women going through the menopause.
Finally, we ended the week on Friday with the second coverage from our recent 2022 Protection Guru Awards, bringing you details of all the winners in our insurer and prestige awards. Despite the challenges our industry faces, as these winners highlight, there are many hardworking and dedicated individuals and firms that are working to grown the market and push for better consumer outcomes.
Have a fantastic week everyone!
