News Review: Protection
Protection opportunity ahead of premiums News in brief
by Kevin Carr, chief executive of the Protection Review and MD of Kevin Carr Consulting
Sainsbury’s Finance claims four in every 10 mortgage holders do not have life cover to protect their mortgage. the research findings
suggest that there are nearly seven million people with a collective outstanding mortgage balance of £245bn who have no life insurance to cover their mortgage and provide support to their dependants in event of their death. it can safely be assumed
that even fewer people will have some form of critical illness cover or income protection, which for many could be more important than life cover.
While this is nothing new, it
does act as a timely reminder. the cost of protection insurance has, generally speaking, been falling for the last twenty years, however, this could change. Factors such as the eu gender ruling, Solvency ii and other changes in taxation for life offices could mean that prices start to rise in 2012/13, which could change the protection landscape as we know it. on the one hand,
churning and switching existing business becomes much less likely if rates are going up, which improves persistency (and reduces lapses). Secondly, if rates are going to increase, which is the general expectation, now is a very good time to recommend protection. But it’s not all about price.
it’s about value. my favourite opening question to potential
The rise and rise of social media
Being an IFA is very much about client relation- ships – and social media is all about relationships. Social media sites such as Twitter and Face-
book are not replacing face to face, phone or email communication, at least not yet; they are simply a new way of communicating in addition to what already exists. If Facebook were a country, it would be the
World’s third largest. A new member joins Linked- In every second, and more than 140m tweets are being sent around the world every day. Whilst much of this is non-business related,
a growing number of people including financial services and the protection industry are using social media successfully because there are many
advantages for both personal and business use. It’s a great way to keep in touch with contacts, media, competitors and quickly broadcast infor- mation and opinions across the industry – from the budget or Retail Distribution Review to last night’s TV or football. Let’s be realistic though. It isn’t going to win
new business overnight. It will take a little time and effort and whilst I have little doubt it will positively influence both business and brand the results won’t be instant. Like most things in life – it isn’t for everyone,
and you’ll probably get as much out of it as you put in. But the question isn’t if we embrace social media, it is how well can we do it.
clients was always “Would you like the cheapest or the best value?” and the reason i liked this approach was that the response was typically “What’s the difference?” which is a great way to begin the conversation. not all ci policies cover
early stage cancers, for example, but i’m willing to bet that most, if not all people, would want this covered. although it doesn’t stop there, even those who cover early stage cancers will vary. Some require medical treatment where as other may pay out on diagnosis alone. the way to move away
from price is to understand the products, understand the client and match the two together. it is this technical expertise that sets good protection advisers apart and if all products were the same advisers would be little more
than a quote engine, which to be frank, is not advice.
• Ageas Protect has launched a new Critical Illness product, which in- cludes 15 ABI+ definitions • Defaqto has launched a free business protection guide and says provider sup- port is the key to unlocking business protection opportu- nities for advisers
• PruProtect and PruHealth have launched a range of new Vitality benefits includ- ing Thomas Cook, Adidas and Vodafone • Aviva UK life and pension sales are up 6% to £8.1bn • Friends Life has signed a new long-term agreement with Best Doctors to include its service in the company’s new individual protection policies •
Confused.com says 28% of people say they could not afford the funeral if their partner or spouse died • Royal London life and pensions sales have grown by 12% • Axa PPP has taken over all underwriting of Permanent Health Company’s private medical insurance and den- tal products • The National Institute for Health and Clinical Excel- lence has banned another breast cancer drug from routine NHS use
Friends Life Protect+. Improved products, more support, greater flexibility. Visit
friendslife.co.uk/individualprotection to find out more
For advisers only. Not for use with customers. Friends Life Holdings (UK) Plc is the parent company of all the companies in the Friends Life group. This group includes Friends Life Services Limited, which has approved this advertisement, and is authorised and regulated by the Financial Services Authority. Friends Life is a business name of companies in the Friends Life group of companies.
www.friendslife.com
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