Adam JonesProduct Actuary

Ways to Overcome

Challenges of Selling

Protection

Challenges of Selling Protection

2

• 94% of UK adults have a mobile phone

(74% have smart phones)

• Average mobile phone bill

- £37 pm

• iPhone X – costs £1,000

• 40% of UK adults have a life insurance

policy

• Only 12% have Serious

Illness Cover

• Cost is main reason for

not taking cover

• Average cost of CI - £21

pm

Challenges of Selling Protection

3

Currently Future

Other

Direct

Protection sales by channel*

*Based on Swiss Re T&H 2016

Ways to Overcome Challenges of Selling Protection

4

1. Transparency and Understanding of Life Insurance

2. Identifying the need for Protection

3. Expanding in to New Distribution Channels

4. Engaging with Customers

5. Providing Immediate Benefit and Value

1. Transparency and Understanding of Life Insurance

5

Expensive Confusing Not Needed

1. Transparency and Understanding of Life Insurance

6

*ABI Keyfacts 2016

Expensive Confusing Not Needed

Financial implication of

being unprotected:• 4 in 5 people who are

diagnosed with cancer are

£570 worse off a month

• 35% likelihood of claiming on

IP, CIC or Life cover by 60*

State benefits:• Help customers understand

what state benefits are

currently in place

• Uncertainty around future

state benefits

Terminology:• Product names

• Literature / T&C’s

• Claims documents

Claims stats:

• 97% of claims were paid out

in 2016*

Disclosure / fairness

• Impact on pricing / other

policyholders

Highlight cost of life

insurance:

• Home insurance - £10 pm

• Income Protection - £14 pm

Cost of delaying purchase:

Total cost of £250k Term Life

Cover until age 60:

• Age 30 - £4046

• Age 40 - £4133

2. Identifying the need for Protection

7

Scenario 1

• 30 year old single male

• Renting

• Earning - £50k per annum

• No dependants

Scenario 3

• 35 year old married couple

• Own home with mortgage of £150k

• Combined earning - £60k

• One child

• No additional debt

Scenario 2

• 32 Year old couple

• Own home with mortgage of £300k

• Combined earning - £100k

• No children

• No additional debt

What products would be recommended?

2. Identifying the need for Protection

8

Probability of 29 year old Male Non Smoker claiming by age 60

Swiss Re T&H watch 2016

Being unable to work due to illness

or accident

Suffering a serious

illness

Dying

Probability of

IP

CIC

Life

Sales

2. Identifying the need for Protection

9

Products needed

• Income Protection - £2,500

• Serious Illness Cover - £50k

• Life Cover – not needed

Scenario 3

• 35 year old married couple

• Own home with mortgage of £150k

• Combined earning - £60k

• One child

• No additional debt

Scenario 2

• 32 Year old couple

• Own home with mortgage of £300k

• Combined earning - £100k

• No children

• No additional debt

Scenario 1

• 30 year old single male

• Renting

• Earning - £50k per annum

• No dependants

Products needed

• Income Protection - £2,500

• Serious Illness Cover - £75k

• Life Cover - £300k / Not needed

• Family Income Cover on death £2,500

Products needed

• Income Protection - £1,500

• Serious Illness Cover - £60k

• Life Cover – £150k / Not needed

• Family Income Cover on death £1,500

Products sold

• Life Cover - £300k

• Serious Illness Cover - £150k

Products sold

• Life Cover - £150k

3. Expanding in to New Distribution Channels

10

How non life insurance is distributed

3. Expanding in to New Distribution Channels

11

Lemonade Cuvva

Brolly

3. Expanding in to New Distribution Channels

12

3. Expanding in to New Distribution Channels

13

4. Engaging with Customers

14

Quote and Application Underwriting Claims stage

• Multi benefits and menu

plan applications

• Improved literature access

• Ability for customers to

complete applications

• Integrated with online

aggregators

• Non-venous bloods

• Use of eGPR’s

• Increased automatic

acceptance

• Nurse screens available

immediately

• Funeral Pledge

• Improvements in payout

times

• Product design to reduce

friction at claims stage

4. Engaging with Customers

15

Underwriting

Claims stage

Anniversary Daily

16

Vitality Shared Value Insurance model

5. Providing Immediate Benefit and Value

5. Providing Immediate Benefit and Value

17

Retention Referrals

Upsell Positive message

Ways to Overcome Challenges of Selling Protection

18

1. Transparency and Understanding of Life Insurance

• How can we make it easier for customers to understand our industry and the importance of

life insurance?

2. Identifying the need for Protection

• How can we make sure the most appropriate products are being sold to our customers?

3. Expanding in to New Distribution Channels

• How can we alter our products and proposition to increase penetration in to the digital and

direct channel?

4. Engaging with Customers

• How can we increase the number of touch points with customers to help them value their

product?

5. Providing Immediate Benefit and Value

• What more can be done to make life insurance relevant?