RDR could see protection growth

Fallout from the Retail Distribution Review (RDR) could mean more advisers will specialise in protection, according to this year’s Protection Review survey.

More than half of respondents (51%) believe there would be greater attention on the sector post-RDR, which would continue to build on the current trend.

The last year saw a significant increase in advisers focusing solely on the sector, up from 0.8% to 5.9% over the period. More than a third (37.5%) of IFAs surveyed also expect to write more protection business in the coming 12 months.

Advisers appear divided on the key elements of technology they require to support their business. A total of 82% said better and faster service matters more than marketing support (60%) while technical training attracted 52%.

When it comes to the key element of a new product, price (46%) narrowly beats good adviser communication (39%) and innovation in design (32%).

The research also shows people continue to overestimate the amount of cover they hold, as just 37% feel their protection cover is insufficient.

However, lower socio-economic groups still have the greatest interest in protecting their family and lifestyle (socio economic groups D and E had the highest percentage for considering CI a financial priority at 19%).

A quarter of people also fear the NHS will decline post-election, which may lead to increased growth in the private medical insurance sector.

Peter Le Beau, co-chairman of the Protection Review, believes there is still a lack of appreciation of the actual cover people have in place.

"We talk about a massive protection gap often based on the cover people say they have," he said.

"Our figures confirm there is gross overstatement of the amount of coverage people actually hold. Coupled with their hazy knowledge of State benefits and sick pay it all adds up to an alarming situation."