http://www.kevincarrconsulting.co.uk/index.php en kevin@kevincarrconsulting.co.uk Copyright 2012 2012-05-09T11:08:27+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_watch_with_kevin_carr_-_march_2012 http://www.kevincarrconsulting.co.uk/blog/article/protection_watch_with_kevin_carr_-_march_2012#When:10:08:27Z Protection Watch with Kevin Carr Protection Watch with Kevin Carr 5. Oh, what a night! Late December 2012… Confusion still reigns across the protection industry about just what exactly will happen regarding the ECJ gender ruling (and other legislative changes) which take place at the end of the year. December may seem like an age away, but advisers should already be thinking about how the changes will impact their business – both before and after. In the run-up to December things may get very busy as people try to rush business through before the expected price increases take effect, especially for cases which need underwriting. Afterwards, when prices have gone up, re-broking old business to save money could be a thing of the past, which could impact significantly on a number of business models. As of right now, the industry doesn’t yet know how changes to existing business will be treated and whether or not policies need to have started (or a future start date agreed) but what we do know is that Q4 2012 is likely to be much busier in the protection market than Q1 2013   4. Hello! This is the protection industry calling. How you doin? It has been suggested that the industry needs a ‘Protection awareness day’ to raise interest for both families and advisers – and generally speaking it’s a very good idea. One of the aspects would be an annual protection statement, which isn’t a new idea, however, the proposal that each one should be sent on the same day every year is probably impractical. There are millions of policies in force and as such these should be staggered by either birthday or policy anniversary.   3. Code Red – think twice before selling that protection policy Protection intermediary LifeSearch has warned against the poor industry selling practices of some distributors and the “laissez faire approach to the quality of distribution” by some providers. In a bid to rectify the situation the firm is seeking feedback on a new code of conduct for protection sellers. It is a very well intentioned piece of work that given further dialogue across the industry should raise standards. It is somewhat ironic, however, that despite 25yrs of regulation the proper protection industry, not PPI - that's a GI product (general insurance), should feel the need to effectively regulate itself to ensure better outcomes for consumers.   2. Fitter, happier, more productive? More than a third of people going through Incapacity Benefit reassessment have been found to be fit for work, according to the first set of official statistics. This either means that a bunch of people have suddenly got better, or that the previous tests may have been too easy. Either way, people are realising more than ever before that they can no longer rely on the state as they once did.   1. Time for Income Protection to move on Advisers who know their protection from their rejection know that when it comes to IP ‘own occupation’ policies are the ones to have. The validity of other definitions, such as ‘work tasks’ and ‘activities of daily living’ have been questioned for many years. But the demand for change is gradually becoming stronger with growing calls from intermediaries, industry surveys and declined claim in the media. Offering an own occupation product for everyone could price some people out of the market. However, as somebody once said: I'd rather pay more for something I need, than less for something I don't – and if the policy isn’t going to do the job, it frankly doesn’t matter how cheap it is.   2012-05-09T10:08:27+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_feb_2012 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_feb_2012#When:13:29:37Z Aviva and Ageas helping advisers to talk about protection Aviva and Ageas helping advisers to talk about protection Aviva has launched an adviser awareness campaign to help IFAs engage with clients and their families when discussing their protection needs. Timed in conjunction with the re-launch of the firm’s life cover adverts featuring Paul Whitehouse, the project is aimed at helping advisers overcome barriers when discussing family protection with their clients. The activity focuses on the positive aspects of family life and encourages advisers to open up conversations around ‘What makes your family special?’ and by switching the emphasis away from protection products towards individual family life Aviva believes advisers will be able to change the way people talk and think about protection insurance. Louise Colley, head of protection sales and marketing for Aviva said: “Family life is such a compelling topic, it really helps to get consumers engaged - so we’re helping advisers to shift the focus of conversation away from finances and on to families.” The insurer has also agreed a partnership with childhood bereavement charity Grief Encounter to provide support to all claimants with children. Meanwhile, new research from Ageas Protect has highlighted that a third of parents don’t know if their existing critical illness policy includes children’s cover. The provider is now calling for advisers and policyholders to check their existing policies to see if it extends to covering their children, which is an important element of CI cover. Most advisers will be aware that modern critical illness policies available from the majority of UK protection providers include children’s critical illness cover, while raising the issue provides advisers with the opportunity to inform customers about the value of their existing cover, especially parents. Both pieces of work are to be welcomed as they give advisers good reasons to talk to their clients about protection – beyond that of merely switching to save money. How advisers choose to introduce the subject of protection with the clients varies from one to the next, however, with TV advertising, family related questions, positive claims statistics, a falling reliance on state benefits and last but not least rising protection rates on the horizon, there has perhaps never a better time to talk about protection. Still not writing life policies in trust? Another reason to think again… I recently heard a story about a single life policy, which was taken out to protect a mortgage, which had paid out when the policyholder sadly passed away. As the policy was called ‘Mortgage Protection’, which is typical for mortgage related life insurance, his new family expected the money to pay off the mortgage in the house where they were living. However, as the policy was not written in trust (nor on a ‘life of another’ basis), in the absence of a will, and as he was not yet fully divorced from his ex-wife, the monies went to the ex-wife, in-full, leaving his new partner (and their children) struggling to afford to live in the house. Many people presume that the main benefit of writing life policies in trust is to avoid potential inheritance tax, but it is also to make sure the monies are paid swiftly, and to the right person, as decided by the life assured. News • Bright Grey has added to its simplified products offering with the launch of its Lifestyle Plus plan • LV= paid 91% of income protection and 88% of critical illness claims in 2011 • Ageas UK has written 89% more protection business in 2011 than it did the year before • Lloyds Bank is to strip five current and former senior bankers bonuses over their role in the mis-selling of payment protection insurance, according to the Telegraph • PruProtect has criticised insurers’ use of subject access requests to bypass GP reports when obtaining customers’ medical information • The government could force people judged too sick or disabled to be employed to do unlimited unpaid work or risk losing their benefits • Legal & General has made a series of amendments to its group critical illness product including coverage for more illnesses • Bright Grey has revealed that it has paid out 91% of critical illness claims in the last six months of 2011 • Two more cancer drugs have been provisionally banned for NHS after it was decided they were too expensive for the potential results • The Protection Review and Income Protection Task Force have produced a list of the top ten things consumers should be aware of when purchasing income protection • Holloway Friendly Society paid 96.2% of its income protection claims in 2011, up from the previous twelve months 95.5% • Openwork is launching a mobile app that enables advisers to obtain protection quotes via Apple devices • Stonebridge Group has added Legal & General to its limited life and protection panel   2012-03-30T13:29:37+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_watch_-_february_2012 http://www.kevincarrconsulting.co.uk/blog/article/protection_watch_-_february_2012#When:09:38:22Z Simple products? Nice idea, but cancer isn’t simple 5. Simple products? Nice idea, but cancer isn’t simple Life insurance is a pretty simple product: You die, it pays out. The illnesses we suffer along the way, however, are not. Over half of all heart attacks in the UK are repeat attacks and diseases such as cancer are far from simple. Many range vastly in terms severity, aggressiveness and in the likely outcomes for the sufferer. As such, simple protection products may never be able to be quite that simple. VERDICT: Back to the lab 4. Ageas latest to promote children’s CI cover New research from Ageas Protect shows that a third of parents don’t know if their existing critical illness policy includes children’s cover. The provider is now calling for advisers and policyholders to check their existing policies. Most advisers will be aware that most modern CI policies include children’s critical illness cover, which provides advisers with the opportunity to inform customers about the value of their existing cover, especially parents. VERDICT: Up 3. Will your life cover pay-out go to the right person? I recently heard about a single life policy, taken out to protect a mortgage, which had paid out when the policyholder passed away. The policy was called ‘Mortgage Protection’ and so his new family expected the money to pay off the mortgage in the house where they were living. However, as the policy was not written in trust (nor on a ‘life of another’ basis), in the absence of a will, and as he was not yet fully divorced from his ex-wife, the monies went to the ex-wife, leaving his new partner (and their children) struggling to live in the house. Many people presume that the main benefit of writing life policies in trust is to avoid potential inheritance tax, but it is also to make sure the monies are paid to the right person. VERDICT: Back to the lab 2. Ghosts have a habit of returning Aviva has launched an adviser awareness campaign to help IFAs engage with clients and their families when discussing their protection needs. Timed in conjunction with the re-launch of the firm’s life cover adverts featuring Paul Whitehouse (who plays a ghost) the project is aimed at helping advisers to focus on the positive aspects of family life by asking ‘What makes your family special?’ and by switching the emphasis away from protection products towards family life Aviva believes advisers will be able to change the way people think about protection. VERDICT: Up 1. Why December might arrive sooner than we think In December we can expect to see the impact of a range of tax and legislation changes to hit protection prices. However, with so many changes coming at the same time, it wouldn’t surprise me if the industry thought about moving the goalposts a little. While this may be no bad thing for advisers, awareness of what is to come will be crucial. However advisers choose to introduce the subject of protection with their clients (TV advertising, family related questions, positive claims statistics, a falling reliance on state benefits or the threat of rising protection costs) there has probably never a better time to talk about protection. VERDICT: Up Kevin Carr is Chief Executive of the Protection Review and Managing Director of Kevin Carr Consulting. www.protectionreview.co.uk www.kevincarrconsulting.co.uk 2012-03-16T09:38:22+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_-_november_2011 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_-_november_2011#When:11:08:48Z Mortgage protection: Still a hufe opportunity? Protection News - NOV 2011 Mortgage protection: Still a huge opportunity? According to Sainsbury’s Finance four in every ten 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 £245 billion who have no life insurance to cover their mortgage and provide support to their dependents 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 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. The rise and rise of social media Being an IFA is very much about client relationships – and social media is all about relationships. Social media sites such as Twitter and Facebook 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 element, including financial services and the protection industry are using social media successfully because there are many uses for both personal and business use. It's a great way to keep in touch with contacts, media, competitors and quickly broadcast information and opinions across the industry – from the budget or RDR 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. In brief: • Ageas Protect has launched a new Critical Illness product, which includes 15 ABI+ definitions • Defaqto has launched a free business protection guide and says provider support is the key to unlocking business protection opportunities for advisers • PruProtect and PruHealth has launched a range of new Vitality benefits including Thomas Cook, Adidas and Vodaphone • Aviva UK life and pension sales are up 6% to £8.1 billion • 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 (PMI) and dental products • The National Institute for Health and Clinical Excellence (Nice) has banned another breast cancer drug from routine NHS use • The Association of Mortgage Intermediaries is asking brokers to send it fictitious payment protection insurance claims they receive from claims firms so it can give them to the Financial Ombudsman Service • Research by Devon-based Unusual Risks shows that 50 per cent of insurers are now offering some form of HIV life assurance • Barclays has signed a new deal to distribute Aviva and L&G protection products Kevin Carr is Chief Executive of Protection Review and MD of Kevin Carr Consulting   2011-12-12T11:08:48+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_august_2011 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_august_2011#When:06:25:31Z Nationwide launches alternative PPI product, but how different is it? Protection News August 2011 Nationwide launches alternative PPI product, but how different is it? Nationwide building society recently launched its new Lifestyle Protector product which allows customers to set the level of cover they require for accident, sickness and unemployment cover. The product is underwritten by Pinnacle Insurance and can be used to cover monthly outgoings. Customers can choose a waiting period of 14, 30, 60, 90 or 180 days although cover is only available for six or 12 months with a maximum benefit of £2,500 a month. While the product includes £30,000 of life cover as standard and offers greater flexibility than some other similar products, it is essentially an ASU product, or a LASU product, if you like, which perhaps sits between traditional PPI products and proper Income Protection plans. On the plus side, premiums are priced individually and cover is based upon the inability to carry out your own occupation, expressed here as ‘your normal occupation, or any job which you are reasonably able to do given your experience, education or training’. Likewise day one cover is available and while pre-existing conditions and self-inflicted injuries are excluded, which is to be expected, there are no automatic exclusions for muscular problems or mental illnesses, which combined represent around two thirds of all IP claims.  However, as with most general insurance style protection policies the terms and conditions, including the premiums, are reviewable, and cover can be cancelled outright by the insurer, which is not the case with Income Protection. IP policies, traditionally known as Permanent Health Insurance, can provide cover for a much longer period, typically up until retirement age, with fixed terms and conditions as well as guaranteed premiums, plus added benefits such as rehabilitation and counseling services.   The Lifestyle Protector will be offered on an advised basis in Nationwide branches and on the telephone on a non-advised basis, although as with most bank products it is not available through IFAs. Is it time for a protection hierarchy of needs? One of the most debated topics amongst protection practitioners in recent weeks has been whether or not we could all benefit from an agreed high level hierarchy of protection needs, and if so what might it look like. Needless to say there has been a range of views on what the ideal order might be and whether it should be needs or product based, but pretty much everyone so far seems to agree that overall it could be a good idea. Term life cover outsells Income Protection by around 10 to 1 – largely because it is much cheaper and much easier to sell – and most would agree there has been too much focus on selling cheap life cover. Not just by the industry but consumers as well – they shop around for life cover, but few look for what they really need.   So could an agreed hierarchy of needs for protection make a difference? Might it get the message across to a few more people that buying (or selling) £9 pounds per month of life cover on its own probably hasn’t protected the family very well?   What might it look like? Here’s one for starters:   1. Income Protection (specifically own occupation) 2. Critical Illness Cover (including life cover and cover for early stage cancers) 3. Life Cover (Term and Whole of Life, depending on the circumstances) 4. PMI (Private Medical Insurance) 5. All others (including other versions of the above)   We would need to get the message across via consumer groups, websites and the media. It would need to be very simple while making some basic assumptions, such as no existing cover, good health and a realistic level of budget. But what do you think?   Round-up • A new online protection distributor ‘The Life Dept’ has launched in a multi-tie with Ageas Protect, PruProtect and L&G • Friends Life has split the business to differentiate between open and closed business • Ageas Protect has launched a guaranteed life cover product through supermarket chain ASDA • LV= paid out 93% of CI and IP claims for the 12 months to June 2011 with a total of nearly £9 million paid out in CI claims, and over £12 million in IP claims • Direct Line has pulled out of the life insurance market • Iain Clark has been appointed Managing Director for Protection at LV= • The first two Protection Review and PFS independent protection training dates were fully booked with a week • The Financial Ombudsman Service are receiving 900 PPI complaints a day • The total number of unemployed people increased by 38,000 in the three months to June to reach 2.49 million • Bright Grey has paid 90% of all critical illness claims in the first six months of the year   Kevin Carr is Chief Executive of Protection Review and MD of Kevin Carr Consulting 2011-09-29T06:25:31+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_-_june_2011 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_-_june_2011#When:13:02:00Z Should advisers charge for helping with protection claims? Protection News JUNE 2011 Should advisers charge for helping with protection claims? An interesting debate has been taking place in recent weeks about whether or not advisers in a post-RDR world would, or even should, charge for time spent in dealing with their client’s protection claims. As intermediary Peter Chadborn of Plan Money recently pointed out, many of us in the protection industry feel that the RDR adviser charging debate probably doesn’t apply because commission will remain, yet anyone selling protection products alongside other regulated products could be affected differently. Most protection advisers who operate quite fairly on a commission basis wouldn’t think twice about helping their client through the claims process, without even considering any additional charging. However, those who seek to operate a ‘fee-only’ service may find themselves with an interesting dilemma: Client: ‘Hello Mr Adviser, my wife has just been diagnosed with cancer. I seem to remember you convinced me to take some critical illness cover, what do we do next?’ Adviser: ‘That will be £200 an hour please.’ Is that really the world we would welcome, or should claims be left purely in the hands of the life office? We all know life office administration can be poor – I once saw a claim acknowledged 6 weeks later on a handwritten compliment slip – and poor service reflects badly on the adviser too. Peter Chadborn agrees: “Unless you have experienced the traumatic phone call from a client with the heart-sinking news that they or their partner have been diagnosed with something horrendous then I won’t begin to try and explain how it feels because I will not do the sentiments justice. How can we put a price on the assistance we provide at times like this?” Then there is the issue of declined claims. I know several advisers who make it part of their service not only to manage claims, but to fight decisions as well. No doubt some advisers would be happy to leave the claim in the hands of the life office, and yet jump back in when it comes to investing the lump sum, which might just be considered to be double standards. Personally, I doubt if any serious protection adviser would ever leave their client purely at the hands of the life office during such a traumatic time. If and how they charge for their time is another matter, but it is yet another valid reason to maintain commission within the protection industry. Should we embrace the new Money Advice Service? Now that the adverts are running a number of leading figures within the protection industry have called for advisers to engage with the Money Advice Service (MAS) rather than fear it. The ABI, reinsurer RGA and leading intermediaries such as LifeSearch have urged the market to take a proactive approach by contacting the service to raise any queries and to build on information offered by it to increase sales. The service promotes independent, unbiased advice, which has caused concern amongst some advisers, with a few challenging the use of the word ‘advice’. However, it should be understood that MAS exists to provide very generic and unpersonalised guidance, such as ‘You should think about what to do about your income in retirement’ or similarly ‘You should think about how your family would cope if you were too ill to work’, as opposed to recommending any specific products, which is where advisers can add value. Speaking at RGA's Write the future conference, Nick Kirwan, assistant director of health and protection at the ABI, suggested advisers could ‘capture’ customers after they had been through the information process: "As an industry we should make sure we're ready to catch people coming out of that process as they're left being told ‘You should be considering some life insurance' but not being told how much and what to do next. His comments were echoed by David Gulland, managing director of global reinsurer RGA, who advised the market to respond to the initiative and recommend any corrections. News in brief • The Association of British Insurers has published guidance terms for insurers in order to reduce the time taken to pay life insurance claims • Ageas Protect is calling on protection providers to label their products according to the percentage of life cover, critical-illness and income protection elements included • Brits are twice more likely to insure their pets or mobile phones than their income, according to research from Scottish Widows • Lloyds Banking Group is preparing to axe 15,000 jobs as part of a £1bn cost saving plan, according to The Sunday Times • Barclays has promised to repay all PPI complaints in full • The average sum assured taken out by the gay community has increased by over £10,000 since last year according to research from Compass Mortgage & Insurance Services • The number of dads holding income protection has fallen by 5% in two years, according to results from Legal & General • More than half of those with life cover fail to upgrade after significant changes in their circumstances, according to Sainsbury’s Life Insurance Kevin Carr is Chief Executive of Protection Review and MD of Kevin Carr Consulting   2011-07-22T13:02:00+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_may_2011 http://www.kevincarrconsulting.co.uk/blog/article/protection_news_may_2011#When:07:46:24Z The latest protection news Protection News MAY 2011 Could Income Protection replace PPI? Speaking at a conference in London market analyst Defaqto has said it believes short term income protection (STIP) products could become the replacement for payment protection insurance (PPI). At the Protect trade body meeting, Ben Heffer, market analyst at Defaqto, revealed that insurers and distributors had jumped ship from most PPI products, with a growth in short term IP taking place. "The point of sale prohibition for PPI could be an impetus to create a standalone market for these short term IP products, to cover not only payments but people's life expenses too." In 2009 there were around 20 short term IP products available, and according to Defaqto, that number has already doubled, while at the same time the number of PPI products has reduced significantly. Heffer also feels the ‘PPI’ brand is now so damaged that change is necessary. "PPI is a toxic name, a toxic brand and we definitely need a new name for this. Short term IP appears to be where is this going, but unfortunately that probably confuses and blurs the lines between short term IP and long term IP.” There has been a lack of innovation in the PPI market over the last year or so, which has probably been driven by growing concerns from distributors about the future of the product based on the Competition Commission ruling. Many distributors and probably providers alike have taken a ‘wait and see’ stance until legislation is finalised. Compared to proper Income Protection PPI is often a very poor value for money product for most consumers. Guaranteed rates, fixed terms and conditions, own occupation cover, no automatic exclusions, claim payments until retirement and so on were, and still are, very strong arguments in the defence of IP over PPI. So the opportunity for something that sits in the middle between PPI and long term IP is clearly the future. Heffer also added a warning that the continued price cutting trend could harm the industry and its reputation with consumers. "The down pressure on price should be a concern to all of us. If cheaper products mean poorer products, that's bad for the consumer." More protection providers to develop online trust forms? Protection intermediary LifeSearch has called for more protection providers to follow the example set by Friends Life and Ageas Protect in allowing life policies to be written in trust electronically. Matt Morris, senior policy adviser at the firm, says it is vital that intermediaries discuss the benefits of writing a policy in trust with customers whenever it is relevant and argues that more providers should facilitate the process online to make it easier and quicker. “The industry recognises that not enough consumers put their policies into trust, yet the process is cumbersome for the adviser,” he said. “At LifeSearch we’ve gone to the lengths of setting up a specialist team but most IFAs won’t be able to do this. We want to see all providers making the process easier with a quick and simple online system. Friends Life and Ageas do it so there’s no reason why the rest can’t.” Online trust options can save both time and money for intermediaries as well as ensuring more policies are written under trust, which has various benefits for the consumer including speeding up the payment in the event of a claim and potentially avoiding unnecessary inheritance tax. More importantly, it’s often the right thing to do for many clients, including mortgage related protection. Ageas recently saw a 60% increase in the number of policies written in trust through the new online facility after feedback from IFAs confirmed that many of them, as well as customers, are put off writing policies in trust because of the laborious and complex paperwork that is typically required. Round up • Aviva has developed a new short-term Income Protection policy aimed at competing in the PPI market • A new specialist protection intermediary Life Cover for All has launched to help people with pre-existing medical conditions find cover • Dame Carol Black has been confirmed as the after dinner speaker at this year’s Protection Review conference • Friends Life total new business rose 52% in Q1 compared to a year earlier • Cirencester friendly has increased both premium income and membership in the last year with the friendly society growing net earned premiums by 6.6% to £12.1m in 2010 with membership growing by 5% • More than half a million people are claiming incapacity benefit (IB) or employment support allowance (ESA) for depression, according to figures released by the Government • Royal London's members have approved the acquisition of Royal Liver's closed book of protection business Kevin Carr is Chief Executive of Protection Review and MD of Kevin Carr Consulting   2011-06-03T07:46:24+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_watch_with_kevin_carr1 http://www.kevincarrconsulting.co.uk/blog/article/protection_watch_with_kevin_carr1#When:10:58:03Z New product launches? VERDICT: UP Protection Watch with Kevin Carr 5. New product launches VERDICT: UP This month has seen new protection product launches from British Friendly and PruProtect. British Friendly launched a new intermediated Income Protection plan offering both short term and long term protection, while the new products from Pru included Family Income Cover, Whole of Life and forward thinking Education Cover, which is designed to cover all potential costs associated with a child’s future education. In a time of mergers and closures, it’s encouraging to see something new. 4. Property remains the top protection trigger VERDICT: UP According to new research from Scottish Provident purchasing a property remains the main reason why clients take out protection, with over nine in ten IFAs considering it a major reason. Given mortgages remain the key protection driver it is no surprise that sales of individual protection products are roughly half what they were around 5-10 years ago, before the mortgage market and wider economy suffered. However, despite this fall in sales, around 1m people a year still buy basic life insurance in the UK, and the rates available for most people continue to fall. 3. Supporting non-advised business VERDICT: DOWN For many years like minded colleagues and I have challenged the role that non-advisers play in the protection market. I think the debate has moved on from the somewhat oversimplified ‘right or wrong’ approach and many would agree there is room for both. However, whichever model a distributor chooses must be sustainable and robust – as should the processes for supporting such models from the provider side. If something looks too good to be true, it probably is. 2. LifeSearch Awards VERDICT: UP Congrats once again to my old muckers on City Road. This year’s awards lunch was a thoroughly splendid event featuring well deserved award winners and a smattering of the great and the good from across the protection profession. The big winners on the day included Ageas and PruProtect, who both walked off with three gongs each, while Axa took two. It was also lovely to see Liverpool Victoria’s Linda Winder collect the marketing and comms award after beginning her PR career with the firm in the noughties. 1. Can we be positive about the recent gender ruling on insurance? VERDICT: DOWN The European Court of Justice has ruled that policies written on the basis of gender constitute discrimination and that we until the end of 2012 to adapt. Most of the initial reaction has been negative with television news reports and the national press queuing up to ridicule this latest example of European interference in our affairs. However, some positive views are already emerging and the removal of gender could drive innovative and forward thinking underwriting changes with potentially greater use of occupation, lifestyle, post code and more in the years to come. That said, while the industry could turn the gender ruling to its advantage, the question of where the line will be drawn remains a threat as there is another directive in the pipeline relating to age and disability. If a similar outcome is reached we will see much greater chaos across the financial services industry, chaos that could change the industry as we know it forever. Kevin Carr is Chief Executive of the Protection Review and Managing Director of Kevin Carr Consulting. www.protectionreview.co.uk www.kevincarrconsulting.co.uk   2011-04-01T10:58:03+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_news3 http://www.kevincarrconsulting.co.uk/blog/article/protection_news3#When:14:47:50Z Two in five families significantly affected by illness Protection News FEB 2011 Two in five families significantly affected by illness More than two in five (42%) UK families have been significantly affected by illness, with 25% of those having had one of the main breadwinners unable to work due to illness, according to new research from Aviva. A further 15% had experienced a family member being off work due to stress, depression or mental health issues, while 7% had a family member who had to give up work to care for a close relative. Yet, when it came to financial protection against such events, just 7% felt their families were fully protected, while just 11% had any income protection. The full results can be found in The Aviva Family Finances Report, which was published in January and coincides with the firm’s national TV advertising campaign mentioned here last month. We’ve all similar statistics over the years, but these days we also know that paid claim rates across the board are averaging in excess of 90%. So what is the barrier? There is a clear need for protection insurance, the state is providing less and less, products are generally less expensive than before, and a higher proportion of claims are being paid than ever before. When the mortgage market picks up protection sales must follow suit. Is ‘low-start’ the new future of protection? Ageas Protect has launched a life and critical illness product which provides cover at a lower initial cost that rises over time. The protection provider, formerly known as Fortis Life, rebranded earlier this year and is keen to make a mark on the mortgage protection market with this new product, especially with first time buyers. Low Start customers can buy the level of cover they need at a lower premium, which gradually increases at a guaranteed rate for the period of the cover. For a 35 year old male non-smoker taking out £150,000 of cover over a 15 year term, Low Start Term Assurance would cost an initial premium of £6.83 per month compared to the YourLife Plan premium of £10.17. Low Start Critical Illness with Term Assurance would cost £22.50 per month initially in comparison to the YourLife Plan premium of £35.11. Anything that helps drive customers towards buying the cover they need should be welcomed, and I wouldn’t be surprised if we see more protection products of this kind in the future. News in brief • Financial Secretary to the Treasury, Mark Hoban, says Income Protection should be one of the first Simple Financial Products (SFPs) made available to consumers • Zurich UK Life reported that 91% of all critical illness claims received in 2010 were paid • Aviva is building on the success of the IPTF Income Protection roadshows by announcing a number of their own events in the coming months • LifeSearch has announced the shortlists for its annual Protection Awards with Ageas, Axa and PruProtect leading the way • Scottish Provident’s critical illness plan has been awarded a 5-star rating by Defaqto for the seventh year running • Reinsurer RGA has added Mark Johnson as business development manager to its marketing team • According to Legal & General the UK business protection gap remains at £1.1 trillion • LV= has appointed Iain Clark, formerly of Legal & General and PruProtect, as Director of Protection • Andy Briggs is to replace Trevor Matthews as Friends Provident Chief Executive Kevin Carr is Chief Executive of Protection Review and MD of Kevin Carr Consulting 2011-03-14T14:47:50+00:00 http://www.kevincarrconsulting.co.uk/blog/article/protection_watch_with_kevin_carr http://www.kevincarrconsulting.co.uk/blog/article/protection_watch_with_kevin_carr#When:16:44:38Z 5. Total Premium Disclosure... VERDICT: DOWN Protection Watch with Kevin Carr 5. Total Premium Disclosure VERDICT: DOWN Intermediaries may have noticed a subtle change to protection quotes recently, where the total premium over the term has been added to the quote, as well as the monthly premium. It is here to stay so trying to be positive we could quote the total premium first, before breaking it down: Should you keep this for the full 25yrs Mr Client the total premium would be £7,500, which works out at just £25 per month. And, as monthly premiums across providers are often similar it can be difficult to show a justifiable saving, but if we compared quotes by the total premium, where relevant, advisers could demonstrate the value: £25pm is £7,500 over a 25yr term – but £28pm is an extra £900 which sounds like much more than £3. 4. IFAs say protection products are essential part of financial planning VERDICT: UP According to research from Scottish Provident 19 in every 20 IFAs believe protection is important for their customers. The survey, which questioned IFAs on their views of protection products and how they are perceived by consumers, found life assurance (48%) was listed as the most essential cover if consumers could only take out one product. This was followed by income protection (36%), critical illness cover (16%) and finally unemployment benefit. However, given that death is the least likely of these events, which is why life insurance is cheaper; shouldn’t these priorities be in a different order? 3. PFS & Protection Review training initiative taking shape VERDICT: UP The structure, content and format of the training is taking shape and pilot dates should be announced soon. We have been working with several potential IFA co-presenters and independent underwriting presenters as well as an outsourced professional trainer. The format will be in half day sessions in three parts: 1. Products, providers, market overview and trends. 2. Technical product details and 3. Advice, sales and overcoming objections. Areas such as ICOBS regulation and TPD updates will also be included. 2. IFA to launch in-depth new website for critical illness cover VERDICT: UP Highclere Financial Services partner Alan Lakey is to launch a new critical illness cover website which compares the cover available from different providers. The award winning intermediary has been working on the site for more than two years and says the driving factor is to move the market away from selling cover on price alone: “Most advisers sell CI on cost and that simply is not good enough. Either advisers are lacking in competence or, far more likely, they are lacking in knowledge.” 1. Aviva launches new life insurance TV campaign VERDICT: UP Aviva has launched a national TV advertising campaign to highlight the importance of taking out life insurance, which will be on our screens from January. The thought provoking advert, part of the series featuring former Fast Show comedian Paul Whitehouse, highlights how he has peace of mind, knowing his family has financial security without him around. Whether or not we believe life insurance is bought or sold, the protection industry needs promoting and along with others who have done so in recent years Aviva should be applauded for their efforts. Kevin Carr is Chief Executive of the Protection Review and Managing Director of Kevin Carr Consulting. www.protectionreview.co.uk www.kevincarrconsulting.co.uk   2011-02-02T16:44:38+00:00