Another option might be to adopt the Vitality model and reward customers for leading healthy lifestyles.
“The industry needs to design products that a normal customer has a reasonable chance of using over their working life and that give them more than ‘peace of mind’ for a lifetime of contributions,” adds Mr Shaw.
Total satisfaction
Alongside strategies to make the current products more attractive to consumers, another potential option for insurers is to create a policy that guarantees 100 per cent of claims are paid.
This would remove any suspicions around the likelihood of a claim being settled.
As non-disclosure is the main reason a claim is declined, insurers would need to take steps such as increasing medical evidence requirements or introducing non-contestability periods to stamp it out. The downside is that this could add time and expense to the product, potentially making it unattractive.
Some are a bit more optimistic about this option, with Mr Baigrie pointing to LifeSearch’s purchase of the trade name Guaranteed Life a few years ago as an example.
“We think it should be tried,” he says. “It would only ever be a niche product as it would need to be a very detailed and thorough underwriting at the point of application. That’s expensive and possibly risky too.”
Claims statistics may be failing to reach as many consumers as the protection industry would like. But, with a variety of additional strategies available to raise awareness of the importance of protection, claims statistics should remain a key part of insurers’ marketing campaigns.
Sam Barrett is a freelance journalist
