New messaging
As well as injecting some humour into protection, the sales message and product need to align to the younger generation’s values.
Ms Bain says: “Many young peoples’ goals are not about assets, such as owning a home. Talk to them about how protection can support ambitions such as travel or being self-employed. Make protection about enjoying life.”
Similarly, while a revamp of the guaranteed insurability options on plans may help to give products the flexibility today’s youth expect, a more fundamental overhaul of cover may be sensible.
Deepak Jobanputra, deputy chief executive at VitalityLife, explains: “Younger people want something now, rather than to have to wait for something they hope they will never need. Our experience shows that they respond better to the idea of buying insurance when they can see tangible benefits.”
His company addresses this by offering a comprehensive rewards programme. This includes a range of benefits that policyholders can use immediately, such as discounts on gym membership, coffee, cinema tickets and Apple watches. While some are clearly rewards, others also help the policyholder become healthier, which can reduce risk and benefit the insurer, too.
While the package was criticised as a gimmick when introduced, it is now widely regarded as a way forward for protection. Mr Harvey says that although the concept can be too complex to explain easily, clients definitely find it very engaging.
“I can see future products where the protection is almost peripheral to the other benefits. This could be really powerful, especially with the younger generation,” he says.
With young people at risk of financial disaster if they are unable to work due to injury and illness, the protection industry must help them access the cover they need. Finding a compelling product proposition and the right distribution strategy is key.
BIG NUMBERS
48%
Proportion of people aged 16-24 years who would not be able to make ends meet for longer than a month (Wealth and Assets Survey 2018, Office for National Statistics)
2.8%
Growth in income protection sales in 2017 (Swiss Re Term and Health Watch 2018)
30
Average age of a first-time buyer(Halifax First-Time Buyer Review 2017)
97.8%
Percentage of new protection claims paid in 2017 (Association of British Insurers/Group Risk Development)
