Protection Watch...with Kevin Carr

Kevin Carr, chief executive of the Protection Review, gives his verdict on five developments in protection this month…

5. New product launches
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. VERDICT: UP

4. Property remains the top protection trigger
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 five or ten years ago, before the mortgage market and wider economy suffered. However, despite this fall in sales, around one million people a year still buy basic life insurance in the UK, and the rates available for most people continue to fall. VERDICT: UP

3. Supporting non-advised business
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. VERDICT: DOWN

2. LifeSearch Awards
Congrats once again to my ol’ 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. VERDICT: UP

1. Negativity on the ECJ ruling
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. VERDICT: DOWN

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 also managing director of Kevin Carr Consulting. www.kevincarrconsulting.co.uk