Karin Lloyd outlines the ideas behind the Family Support Initiative and why we have to put aside traditional brand marketing for this initiative if we want to be trusted partners.
Put simply, during 2014 we will mount the biggest campaign this country has ever seen to bring both the risk and impact of long- term ill-health, and the need for income during that very stressful period, to a national audience.
We want to create a year-long national conversation between people who have been made all too painfully aware of their financial vulnerability and those who hope it will never happen to them, but who still have a chance to mitigate the impact. In doing so we hope to be able to break the link between disability and poverty forever.
Our ‘big idea’ is to work with real families where the breadwinner has been unable to work for some time and has an uncertain future. We will support them financially for a year and enable them to show what the experience of coping with disability is like and how a financial cushion enables them to deal with day-to-day living. This hidden world is chock full of inspiring stories in which people battle back from debilitating ill health and it’s time that powerful voice was used to show people who have yet to experience anything so devastating how their path can be eased if they do go on to suffer the same fate.
We intend to work with a number of leading charities to nominate people who need financial help because they are unable to work. We want to find people with different medical problems – among them people with strokes, heart problems, MS, Motor Neurone Disease, severe depression, spinal injuries and cancer.
Our role as insurers will be to facilitate (not direct), to listen and learn (not preach), and to use that insight to offer (not hard-sell) our best solutions in a new climate of awareness and trust. And we need to make sure we never betray that trust. We can show off a bit – as an industry we have long been developing access to services like counselling, case management and rehabilitation to help people to cope and in many cases to return to breadwinning status. We’ve probably been a bit shy about those successes and a bit too afraid of having the facts distorted; now’s the time to get loud and proud about what we do well and to learn what we need to do better.
Of course the biggest challenge is to ensure that the battle these people face is shared with a wide audience. We are talking to TV production companies and planning a social media campaign that will raise awareness to unprecedented levels.
Why are we doing it now?
This year Macmillan Cancer Care will probably pay more in emergency financial grants to people (well over 30,000 families) who can’t work due to illness, than the entire income protection industry of the UK. Check out http://bit.ly/19aNQMJ for details of Financial support available to people with Cancer. During an interview on Radio 5 live on 30/12/2013, The Stroke Association described a similar need to provide finiancial grants to people who have suffered a stroke. The fact that there is virtually no private provision to prevent this financial burden perplexes charities like Macmillan and the Stroke Association and diverts funds they intended to deal with medical and care needs towards picking up the tab for financial ones.
Given the size and profitability of the financial services industry in the UK, is it right that charities are doing our work? Shouldn’t we be looking at this as an opportunity to offer something genuinely useful to the British public and let charities like this focus on what they originally intended? Why do we only sell around 120,000 individual income protection policies a year when the recent consultation paper on a Simple Income Replacement policy suggested the market for such a product amounted to well over 20 million people? Only just over 3 million people in the UK have any sort of cover; however you look at it this is a mismatch that we have to do something about.
Yes there are barriers – we’ve been identifying them for years – but rather than gnashing our teeth over them, this initiative intends to knock one of them squarely out of the way.
Developments in the external environment including welfare reform, the simple products debate, a media focus on the financial disparity between working vs not working and the growth of social media, have created a moment in time when people are more open to discussing the idea of self-reliance than ever and have the tools to engage in a transparent grown-up discussion.
Why focus purely on awareness?
For too long our message as an industry has been a thinly veiled attempt to shift more policies and the British public see through that very quickly. The sort of visceral advertising that Aviva have done in recent years has made a real difference but we’d like to see something specifically targeted on income protection because if people can’t pay their bills, every other aspect of their finances falls down like a house of cards.
We believe it is right to focus on the regrettable fact that both short and long term inability to work is a possibility for us all … and if it does happen it can have disastrous financial consequences. If that message gets through, the public basically have three options besides insurance for making sure they don’t end up needing an emergency grant from a charity:
Rely on the State
This is appropriate for some and we have identified these groups in another part of this paper, see the paper entitled Welfare Changes for details.
A recent HSBC survey (http://www.newsroom.hsbc.co.uk/press/release/8_million_households_could_not) of over 1,000 UK households found that a quarter (25%) have no savings at all to fall back on, up from 19% in 2012, while one in 10 have £250 or less. Based on average monthly outgoings of £1,500 they would only last five days before running out of funds. Those aged 16 to 24 and 35 to 44 are least prepared for a financial emergency – and worse prepared than they were in 2011.
Although 1.6m people in England and Wales have a second home (UK Census 2011), many of these are owned by retirees and are not income-producing assets. Other forms of investment rely on being in the right form to provide income when you need it and you can’t predict when that will be. The best returns are available for capital tied up for a long time, so while they may be suitable for retirement needs, they do not cater for a sudden need to take an extended period of time off work
When prompted to think about it, the majority of people will conclude for themselves that insurance is perhaps their only viable option so we don’t need to ram that message down their throats. But the current financial vulnerability of the UK shows that we do need to prompt people to think about these issues. So when we talk about awareness, what do we mean? What do people need awareness of? We think there are several components that the FSI can have an impact on:
‘It couldn’t happen to me’
The risk of suffering from a condition that could keep people away from work is a key component and although statistics are often used to raise awareness, they remain abstract. The FSI tells the stories of people who used to think the same until it did happen to them, and the watching public can see for themselves how similar these people are to their own families.
This is the fundamental message of the Council for Disability Awareness (http://www.disabilitycanhappen.org/diam/), a powerful American lobby group funded by the disability insurers but with a very strong message to the US population… ‘ Disability can happen’. Critically, they do not try to sell insurance, they simply seek to raise awareness of the issues and let the American public draw their own conclusions. We have close ties and will be drawing inspiration and practical ideas from the experience of the CDA.
‘If it did, I’d manage somehow’
By working with charities to tell the stories of people who needed charity help to rescue their finances, we will be prompting people to think about exactly how they would manage, and what kind of preparations they can put in place to reduce their financial vulnerability.
We will have supporting materials, tools and forums where people can prompt each other, find resources to help them understand what they have in place already, share their own solutions and link to further sources of immediate help. The emphasis will be on enabling people to share useful experiences between themselves rather than the insurance industry telling people what they should do.
‘Who can I trust with my money?’
It’s fair to say the insurance industry as a whole does not have the best track record either in practice or in the public’s perception, as noted in numerous surveys, including the Swiss Re Insurance Report and in research by The Syndicate, and the public do not distinguish between different parts of the industry. The involvement of the insurance industry in this initiative will make some people suspicious, but that is precisely why we have to do it and do it in a way that is devoid of all cynicism or attempts to push insurance products.
Trust also cuts both ways; we need to trust consumers to look at the facts, contemplate their own situations and understand their choices – we need to treat them like the grown-ups they are. Our language needs to change from ‘why aren’t they buying?’ to ‘what do we need to change to engage people more?’
The publication of claims statistics, for which the IPTF successfully campaigned, is useful progress and needs to be in place and easily accessible for when a newly-aware public do go looking for income protection insurance, but we need to do more.
By supporting families with no strings attached in the public domain, the Family Support Initiative is showing a new (to them) face of our part of the industry, one that is distinguished from other parts of the industry and that is not only trying to do the right things but demonstrates the skills and integrity to do them. And importantly, it is not just telling people about them, it is showing them in action.
We believe it will also be a huge learning experience for the industry, revealing insight that no statistics-based research can reach that will help us to tailor the right offer and make that offer in ways that are meaningful.
‘Who can I talk to about this?’
Currently, if people do go looking for information about the financial consequences of disability, the sources of help and information are few and far between, so we will be working with MAS (https://www.moneyadviceservice.org.uk), as well as the independent financial adviser community, Which?, the Citizens’ Advice Bureau and of course, the charities involved.
Our use of forums and social media will allow people to interact with the content of the campaign, giving us a real-time insight into what they think, what they need to inform their own decisions and giving us a way of sharing genuinely useful information with a wide and engaged audience.
We believe that this people-centred initiative creates a unique platform for sustained debate around the financial issues associated with ill health.
The awareness created by this debate will prompt people to seek solutions and we will be creating a demand for information and advice services that can guide people towards solutions that best meet their genuine needs.
We also believe that taking such bold action will demonstrate the credibility and appetite of the insurance industry as a potential partner for government in solving the many financial issues associated with disability. We have been delighted and encouraged by the response received within the insurance industry so far and look forward to working with all those who have committed in principle to supporting this initiative.
In common with our friends at Disability Rights UK (http://disabilityrightsuk.org/), we want to break the link between disability and poverty…for good.
Karin Lloyd is an independent Claims Consultant with a background in the direct market and reinsurance (in the UK and globally) who has been a member of the Income Protection Task Force Executive since 2006. She remains committed to the cause of raising awareness of the financial distress caused by being unable to work, and to prompting the UK public to consider their own vulnerability to ill-health and which solutions may best meet their needs.