Back in March this year we wrote about the need for innovation. We mentioned that, according to a recent survey by the British Insurance Brokers’ Association (BIBA), brokers didn’t believe that insurance companies were leading in the innovation space with 42% believing that insurers haven’t embraced innovation at all.
It seems that nothing much has changed. This month a consumer panel has called on the industry to develop better insurance protection products. According to the Financial Services Consumer Panel, protection products are too complicated and no longer meet the needs of a modern workforce.
It’s a great concern because it leaves consumers with inadequate protection insurance such as life cover, critical illness or income protection. It leaves them as well as their families vulnerable and without finances should something like an accident or death occur to the breadwinner of the family.
The findings of the panel’s consumer research and discussions with the industry representatives highlight the lack of innovation in the market over the past three decades and calls on the industry to do something about it.
“Protection products have not kept pace with the needs of today’s workforce. People now are more likely to be self-employed or have insecure employment, with volatile incomes. Our research shows that people want value for money products that suit their lifestyles, and that they understand. The industry needs to respond to this, rather than just selling the same products as it did 30 years ago. We hope the industry, regulators, and other stakeholders will join in the debate about how this market can be improved for consumers. More of the same is not an option,” said Sue Lewis, Panel Chair.
It’s unsurprising, therefore, that the individual protection market as a whole is not currently growing. The 2018 State of the Market report from the ABI (Association of British Insurers) says the total number of individual protection contract numbers fell by 4%. But it’s not like protection insurance is not needed. The ABI found that 2017 around one million UK adults were unable to work because of serious illness or injury.
We believe there are many reasons why there’s a lack of innovation in the industry, but the BIBA research did point out that it was software houses, who are supposed to be tech leaders, that were holding the insurance industry back by not being innovative enough themselves. When brokers were asked about the reasons for why they weren’t able to innovate, 77% of respondents said they blamed the cost of implementation followed by software house development (62%).
If find that you’re being held back by your software provider we’d like to encourage you to consider your options. There’s nothing wrong with shopping around to see what competitors are offering and switching. If you want to collect data or try something different like launch or adapt a scheme we’re here to help. If you come up with something that you want done in a short period of time, we can help to turn things around quickly. Change is necessary. The industry needs to remain relevant with its products and we need to make them easier to understand for our customers. You can stick to the way you’re doing things now, but if the stats are anything to go by, it’s definitely not sustainable.