Opinion & Analysis
ANDREW WIBBERLEY: The right ingredients for IP
08 Apr 2019
Having your cake and eating it – in which Andrew takes an analogy and devours every last morsel from it.
Whether it’s because of my mum being a Home Economics teacher, my son’s current obsession with potions or basic hunger pains on a cold Tuesday afternoon I’ve been thinking about the right ingredients for a truly potent Income Protection product.
I believe there is the potential with the current basic ingredients to cause sales to rise impressively. But too often we end up like contestants in the Great British Bake Off technical challenge nervously looking at what others are doing rather than concentrating on doing the basics well ourselves.
Underwriting, pricing and claims are the eggs, flour and water of our Income Protection cake. If those ingredients are not good quality then no amount of fancy toppings will flourish. For us that means fair and fast underwriting with an explanation of adverse decision where they are made, competitive pricing (noting Greggs’ performance against Patisserie Valerie’s) and consistently excellent practice in claims for all customers.
The risk is that IP enters the CI world and the current vogue for value added services aren’t just the cherry on the top but become tasteless hundreds and thousands – liberally sprinkled on to look pretty but with no discernible advantage to the final product. As insurer after insurer loads up with more garish things on top of the cake the same basic ingredients lie underneath with more to carry and not much relevance to the garish concoction on display.
Maybe we need to use the Black Forest Gateau (ask Alexa, millenials!) as our inspiration here. Take the tastiest cherries, or most sought after services in today’s world and blend well into the recipe rather than popped on as an attractive looking after thought. This would mean changing the whole recipe – potentially reducing the underwriting to allow other ingredients to shine, whilst making sure that everything still comes together perfectly.
For anyone buying our Income Protection food labeling is critical to give confidence about what they’re getting. Own job or own occupation makes as much sense as saturated or unsaturated fats to most people. One is definitely less bad than the other – but which and why?!? With the IP landscape likely to have more distinct propositions moving forwards we should do all we can to enable simple comparison by at least advisers (dare I say waiters?) and preferably customers to ensure that informed decisions can be made and costly allergic reactions do not occur.
We have been reminded in the last couple of years that a slice of cake is often enough for an individual. The increase in short term income protection sales enables you to keep you going without breaking the bank. Embracing that approach will be at the centre of keeping the product affordable at an introductory level and making the product available to more.
Of course it’s always nice to have cake with others, and with Group income protection people can do that. We need to consider if we can offer those who aren’t together at work but have other communities or collaborations ways to join together in a similar way. Letting the ever growing band of the self-employed have ways to access these group style arrangements would be a really tasty offering.
With my underwriting background I must point in concluding that eating cake increases your chances of obesity and early sickness and death. I therefore trust that you have all focused on the insurance ideas smuggled within this piece and not been distracted into thoughts of yummy, scrummy cake.