Written by Rich Horner, Head of Individual Protection at MetLife UK
We only need take a cursory glance at the levels of written premiums and volume of policies sold in 2023 to see there is and will be continued market growth across the UK protection market this year and beyond. Even with the cost-of-living crisis putting unrelenting pressure on employers, advisers, and consumers alike, premiums written in 2023 are up year-on-year and income protection is up by a notable 26%.
Yet, there remains an avoidable protection gap. A large proportion of the UK are without any form of cover, not helped by the fact so many have reduced or no savings amidst a higher cost of living. Indeed, the fact that 96% of people cut back on income/individual protection[2] to save money shows that we’ve got a lot of work to do.
So, to assess how we can close this gap, both at MetLife and as a wider industry effort, it’s important to consider consumer duty, and the simplification and innovation of protection products.
Across the industry, the new standard of consumer duty regulation this year has been a catalyst for how providers best serve their customers. Now more than ever before, a range of options must be considered for a customer’s individual needs. There is a duty to discuss and justify who products are created for – by clear target segments – and show the ongoing value provided. If we do this well, we can protect more customers and grow the market.
With that in mind, MetLife conducted a survey last year to understand what customers see as value. 78% said they want a product or service that’s appropriately tailored to their specific needs. It can’t be any clearer. The products and services that protection businesses offer need to be personalised and inclusive to best suit the changing needs of the public. Product innovation is no longer a nice-to-have.
It also in turn signifies the need to remove the complexity in insurance for many products which holds back many people from taking out protection. Advisers have a huge role to play here, particularly for complex products, which are still required where customers have complex needs and where extensive detail to support understanding will always be necessary.
Offering simple, easy to access products will do much of the heavy lifting in growing the market. As an industry, I think we are guilty of offering too many options. Too much choice isn’t always a good thing and can in fact deter some from pursuing protection altogether, instead casting it down the “too difficult to sort” admin list.
At MetLife, we are committed to getting to a place where protection is made simple for consumers and advisers. This narrative will lead to the clear benefits of each individual product being understood by the end-customer. By making this process as direct and simple to access as possible, customers will in the future will be able to easily adapt and reassess their products as their personal needs change. MetLife’s product development process always includes our distribution partners as it is the intermediaries who will be able to explain the nuances of all products and create a portfolio of propositions to cover as many risks the customer faces as possible.
To support this as an industry, we need to be willing to innovate and bring new and adapted products to market and also consider the advice process to support this. Technology is going to provide a huge opportunity to reach more customers than ever before and drive forward innovation. It’s important we’re getting the structure in place to make protection products more accessible. In time, more products will be bought in different ways – online, self-service – via different channels, affinity partners or brands. Everyone needs a choice of how to buy – not too many of course – but enough to grow the market. This is why we’re so passionate about protection being made simple.
To conclude, it’s not just about improving accessibility or innovating product design, but also ensuring we as an industry continue to offer our customers real value. It’s high time the industry designs and creates the right products to best suit the evolving needs of its customers. It’s also of mutual responsibility of advisers to communicate the benefits of the products in the right way to their clients making it digestible and as simple as possible for all.
