Title: Protection Review Conference Innovation what innovation
1Protection Review ConferenceInnovation what
innovation?
Roger Edwards , Product Director, Bright Grey
2 So how innovative are we at the moment?
So how innovative are we at the moment?
3Spiral of price competition
Industry infra-structure geared to price only
Ambitious plans to grow market share
Short term need to meet targets beats long term
desire to innovate and be different
Prices fall further
4Protection markets
Critical Illness
Term
Income Protection
5Life cover for less than 26p per day
When it comes to protection are retailers
behaving like retailers?
6Will price continue to fall?
7Difficult to break out
- Prudential Flexible Protection Plan
- Same market
- Alternative to CI
- Virgin Cancer Plan
- New market?
- Alternative to CI
8What advisers recommend?
Given regulation, advice justification, reasons
why, threat of legal action
- Existing CI
- Cheap rates
- Comfortable with cover
- Proven concept
- Millions paid in claims
- Impact based CI
- Higher rates
- New definitions
- Unproven concept
- No claims history
9Is innovation taking too big a risk?
- Long term
- Strategy
- RD
- Innovation
- New product lines
- Short term
- Sales
- Profit/share price
- Tactics
- Safety in similarity
10Difficult to break out
- Can you launch something new into the adviser
channel and expect instant success? - How many companies will take a long term view?
- More than one company launching something new
might work but what about the Competition Act?
11To summarise the current environment
- Doing the same things
- To the same people
- With the same products
- Using the same processes
12 So is it really possible to innovate?
So how innovative are we at the moment?
13How to change the current environment
- Doing the same things
- To the same people
- With the same products
- Using the same processes
- Do different things
- To people who are NOT currently customers
- With different products
- Using different processes
14Evolution or revolution?
15Innovation
We couldnt do that because
Thats a daft idea..
The Reassurers wont let us do that.
My only concern is that..
16Innovation
- Are we designing products for consumers or our
distribution channels? - Bells and whistles that let our consultants get
one up on the competition or benefits of real
value to the consumer? - Recent examples
- silent heart attacks
17What is a protection product?
a piece of paper to file away and forget about?
a promise to pay money when something horrible
happens?
peace of mind?
compensation for life changing events?
debt repayment?
18The traditional protection product
- Piece of paper
- Promise to pay after a horrible event
- Just money
product
19The problem
- Exciting
- Status - you can polish it
- Material goods
- Its an experience!
product
20Reality
product
comms
apply
claim
- piece of paper
- promise to pay after a horrible event
- just money
21Where to innovate
Innovation neednt be confined to the product
think about all the proposition touch points
22comms
23Communication
- Create a better perception
- Engage with the Government
- Education on school syllabus, free consumer
guides - Cultural influences
24Affordability
25Information overload
- Innovation on advice
- Navigate through the massive maze
26Dont understand it
TPD
PHI
LTA
SACIC
MER
GPR
PMI
PTD
IP
ACIC
27Perception
In the event that you procure one item, as
defined by the appropriate boxed quantity and
confirmed by the electronic point of sale
supervisor, we will assist you in the procurement
of a second item, as defined by the appropriate
boxed quantity, for no charge, that is, no
monetary transaction, as defined by an exchange
of currency, would be needed
Buy one get one free
28Communication innovation
- What about 24 hour protection channel?
- What about advertising on DVDs?
- What about the flavour of the month boy/girl
band promoting protection? - Include a protection podcast on each new iPod?
29apply
30Apply
1992 App
- 1992 application form
- 2 pages
- 2004 industry average
- 32 pages
31Are we doing preferred lives?
- Even more intrusive questions
- Less people accepted at ordinary rates
- Preferred lives products through the back door
- Length of process leading to reduced mortgage
protection sales?
32GP report
- Expensive
- VAT
- The Holy Grail is a replacement for the GP
report - or to do away with it all together
33Do we have the bottle to replace the GP report?
Is the industry obsessed by removing every
possible risk from writing risk products?
34Application innovation
- What about blood spots and saliva profiles?
- What about drop ins to Boots for medicals?
- What about microchips embedded into the back of
the neck? - What about full medical details on the new
Government Identity Card?
35product
36Consumer needs
Decreasing life Level life
Family income benefit on death Income protection
for occupational disability
37Innovative products
- What about IP - when are we going to fix it?
- Is evolution of CI restricted to illness
definition nitpicking? - What about hybrid products?
- What about Impact Based Cover?
- What about a replacement for TPD?
- What about protection in a box or on a smartcard?
38Lessons for the IP market?
39 Wow!
- Benefits payable for full term or age 60
- Own occupation cover
- Tick box application no underwriting
- Everyone pays the same rate
40But..
- 3 year pre-existing conditions
- Stress, backache or nervous disorder.
41Longer term
Is the answer MPPI or IP-
Mortgage Brokers
Financial Advisers
MPPI
IP
42claim
43Claims
- Long-winded process often a repeat of initial
underwriting - Private detectives
- Treating people like people, not policy numbers
- Clarity We are declining your claim because of
caveat emptor and uberrima fides.
44More than money
- More than just a hand out
- Helping Hand
- Best Doctors
- HCML
- Real valuable service to all customers and their
families - Money when needed and pro-active help
- Best advice benefit to the adviser
- Repositioning protection to be help first, money
second
45Claims innovation
- What about paying them (ha ha!)?
- What about no financial underwriting at claim for
IP? - What about immediately paying 5 of every
critical illness claim? Or cover their monthly
outgoings until the decision is made?
46Summary
product
comms
apply
claim
- piece of paper
- promise to pay after a horrible event
- just money
47Summary
- Do different things
- Not just price
- Not just stealing existing market share
- To people who are NOT currently customers
- Other markets
- Other distributors
- With different products
- New product models tailored to market niches
- New propositions
- Using different processes
- Simplified underwriting
- Easy application
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