It’s generally understood that a wholesale shift in public perception of insurance companies is required.
It is needed if we are to encourage the approximately 90 per cent of the UK population that does not have income protection to sit up and take notice.
The insurance ‘brand’ as a whole isn’t sexy. But then neither is that of British Airways, yet our 100-year old travel institution was last year named the UK’s most loved brand for the third year running, seeing off younger and, arguably, more exciting competition such as Apple and Google. Could individual income protection (IP) insurers learn something from BA?
It’s not as daft an idea as it may seem. And it’s all to do with brand experience.
Apparently BA impressed industry experts and consumers for its “consistently strong performance” according to The Centre for Brand Analysis, which collates the annual Consumer Superbrands list.
They concluded that reliability and conservatism were valued qualities following the economic uncertainty of recent years.
Usage and trust
Brand experience and trust are very closely correlated with usage, according to market research company Mintel in its report entitled Trust & brands – UK – Feb 2016.
This is inherently tricky with IP as non-policyholders have usually never heard of it, never mind identified a need for it. And existing policyholders only ever experience the benefits once in a blue moon – if indeed ever - at the point of claim.
Although the IP sector saw an increase in sales last year of 2 per cent, shifting the industry out of a nine-year long stagnation, much more needs to be done.
The ABI’s 2014 report Welfare reform for the 21st century found that out of a working population of 33m UK adults, only 10 per cent had any form of income protection (around 1.2m IP and 2m Group IP).
Real step change will only ever be achieved when consumer experience and perceptions of the product and sector in general improve.
To achieve this, touch-points with insurer brands, products and services need to happen much more frequently.
This involves building upon recent high-profile industry-wide initiatives such as Seven Families and transparency around claims statistics, while doing more to give policyholders reasons to make contact outside of a claim.
This is from meeting changing customer needs around accessibility, to providing more added value services to ensure ongoing support to policyholders and their families. More on all of this later.
BA vs IP
For now, let’s consider the BA experience. Firstly, the product – a flight – is something that is sought out: it meets a need. Generally, you know you’re going to get looked after on a BA flight, seats are comfy, legroom is half decent and refreshments are included.
The booking and check in processes are digital and straightforward. BA’s prices appear on all key comparison sites and what you see is what you get. The quoted price isn’t usually inflated on booking by a whole load of supposed ‘extras’ such as the inclusion of luggage.
