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Review: Protection


A campaign can help sales by


Kevin Carr, chief executive of Protection Review and MD of Carr Consulting & Communication


Like all areas of financial


services the protection indus- try has important messages to get across and campaigns can be cost effective. As long as there is always a consumer centric aim at its core the me- dia will oſten lend their sup- port too. Tere has been a range of


protection campaigns over the years including these:


Protection on the TV Five years ago the industry tried to raise £5m from in- surers to advertise the need for protection on prime time television, without promot-


ing any particular insurer or product. While the campaign effectively failed, several firms who were involved in the proj- ect subsequently went on to advertise protection on tele- vision, including Unum and Aviva.


Social media @scotprovsaysno is the twit- ter account of Chris Harg- reaves, who had an income protection claim declined by the insurer. He took his claim to the Ombudsman, where it was overturned, and has since campaigned to improve the policy definitions for IP poli- cies, in particular improving the ‘Work Tasks’ definition of incapacity.


Fred Tose with long memories may remember a cartoon


Don’t forget protection


It seems mortgage sales are on the increase once more, especially for first time buyers, which is excellent news. Lending to first-time buyers in June was up 30%


year-on-year and the Council of Mortgage Lenders says the second quarter of this year was the highest quarterly total for lending since 2007. First-time buyers also continued to increase the amount they borrowed – with an average loan size of £117,000 in June up from £112,500 in May. As a result of this there has been a stronger growth in the value of loans advanced to first-time buyers which totaled £3.5bn – an increase of 9% in value compared to May and 40% on June last year. Some reports, however, suggested that with mortgages making a welcome return, protection sales will fall by the wayside. People still need protection and for many firms it is


the bread and butter sale that could be the difference between a company staying in business, or not. Protection sales compliment mortgage sales very well and it could be counter-productive to dismiss protection just because mortgage sales are increasing.


14 MORTGAGE INTRODUCER SEPTEMBER 2013


character called Fred who drove home while a voiceover said: “Home sweet home, Fred — or is it? Te fact is, Fred, you’ve only got half a home — half a hall, half a bedroom. Forgot it had gone up in value, didn’t you. Fred — you’re un- der-insured!”


Publishing claim statistics One of the most successful campaigns supported publish- ing claim statistics for critical illness


cover. With support


from the media its impact is still alive today with compa- nies publishing a range of sta- tistics on a regular basis.


Income protection charter With public uncertainty fol- lowing the PPI mis-selling scandal the market needs more clarity on issues like claims disclosure and exclu- sions. Te Income Protection Task Force has been working with various consumer bodies to develop a Charter for offices selling income protection.


PCOC Te Protection Distributor’s Code of Conduct set up a 5-point code of conduct for those selling protection. It has received unanimous support from more than 50 adviser firms and is currently being discussed with insurers.


Starting a campaign Before starting a campaign it is worth making sure of a few points: Is there a clear aim? Is there a realistic timescale? It is consumer driven? Is it cost- effective? Is it winnable? A campaign doesn’t always


need lots of people and a big budget. Just ask Chris Hargreaves.


News in brief


• British Friendly has launched a new simplified income protection product called “Breathing Space” which has no financial underwriting (either at application or claim stage) and pays claims weekly of up to £250pw (£13,000pa). • Aviva has launched a short film to help


customers understand how critical illness insurance works.


• More than 12m Britons are without a financial back-up plan, according to Bright Grey. The provider’s annual Financial Safety Net report found 60% of the adult population say they do not have any financial protection in place should the worst happen. • Friends Life is to launch a range of simple protection products through a partnership deal with Virgin Money at the beginning of 2014. • Legal & General has highlighted how smoking can affect the cost of a life insurance premium. According to figures from L&G, at 25 years old, a smoker’s monthly life insurance premium is £13.13 - compared to just £9.68 for a non-smoker. However, at 55 years old, the monthly life insurance premium for a smoker (£159.65) can be nearly 2.5 times more expensive than for a non-smoker (£64.42). • Reliance Mutual Insurance Society has entered the over 50s life assurance market with a direct to consumer offering.


www.mortgageintroducer.com


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