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The Year In Protection David Heeney Chief Marketing Officer, UK & Ireland Scottish Re. The Protection Review Conference 11th July 2007, Café Royal. The Year In Protection - Agenda. Are we making progress? News review Views of industry experts Immediate priorities

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The Year In Protection

David Heeney

Chief Marketing Officer, UK & Ireland

Scottish Re

The Protection Review Conference

11th July 2007, Café Royal


The year in protection agenda
The Year In Protection - Agenda

  • Are we making progress?

  • News review

  • Views of industry experts

  • Immediate priorities

  • Conclusions and agenda for the year(s) ahead


The year in protection agenda1
The Year In Protection - Agenda

  • Are we making progress?

  • News review

  • Views of industry experts

  • Immediate priorities

  • Conclusions and agenda for the year(s) ahead






Are we making progress
Are we making progress? bad……

Computer says “no”


The year in protection agenda2
The Year In Protection - Agenda bad……

  • Are we making progress?

  • News review

  • Views of industry experts

  • Immediate priorities

  • Conclusions and agenda for the year(s) ahead


News review
News Review bad……

  • They say “a week in politics is a long time”

  • A year in protection is an eternity!

  • The past 12 months have produced many stories affecting our industry

  • Here are some of the most significant…………


July/August 2006 bad……


Liverpool Victoria offers Red Arc services to all CI policyholders

ABI launches new SOBP for PMI

ABI says sales of life & pensions up 25%

Scottish Equitable Protect research: “40% have false CI expectations”

ABI launches member consultation on improving clarity in on-line and telephone applications for life and health protection insurances

ABI launches PPI checklist

FSA to consult on term assurance “age 70” rule


September/october 2006 policyholders


GE Life sold to Swiss Re policyholders

Axa buys Thinc Destini for £100m

ABI supports abolition of “age 70” rule

Liverpool Victoria updates Flexible Protection Plan using STP

Standard Life buys stake in Simply Biz

Pru turns against those IFAs that churn

Royal Liver launches new CI product based on ABI standards

FSA uncovers more PPI failings

OFT refers PPI sector to Competition Commission

Scottish Widows terminates ASDA partnership


November/december 2006 policyholders


Unum Provident extends IP Plan to age 70 policyholders

Kenny leaves ABI

Income Protection Taskforce launches White Paper

Standard Life re-launches IP product

ABI changes SOBP cancer definitions

ABI Income Protection Workshop: Towards 10 million satisfied customers


January 2007 policyholders


LifeSearch tie up with ASDA policyholders

FSA fines GE Capital Bank £610,000 for PPI failings

“Tine’s Up At FSA”

Treasury may revive PTA in a different format


february 2007 policyholders


Repossessions hit six-year high policyholders

FSA fines Capital One £175,000 for PPI misselling

Treasury backtracks on PTA U-turn

Legal & General buys Nationwide subsidiaries

L&G sells PMI business to Axa

OFT refers PPI market to Competition Commission for further investigation after public consultation

Prudential: “£43.9m protection claims declined”


MARCH 2007 policyholders


PPI refunds good for consumers, says FSA policyholders

Liverpool Victoria re-brands as "LV="

Haddrill urges Balls on PTA

L&G upgrades CI cover

FSA makes case for PTA

Budget: Government kills PTA

Pru announces launch of PruLife (50/50 JV with Discovery)

LV= takes equity stake in Lighthouse Group

FSA ICOB Review: Interim Report published


april 2007 policyholders


Royal London and Royal Liver in merger talks policyholders

LV= and Bright Grey revamp CI cover

GE Life re-brands as “Tomorrow”

FSA scraps Age 70 rule

BUPA revises CI product

ABI consultation document on changes to PMI definitions

PruHealth and Boots launch PMI on High Street

BUPA confirms it may sell off hospitals

Deadline for implementing ABI SOBP for CI

Nick Kirwan quits Scottish Widows

PTA pipeline deadline extended to 31 July


may 2007 policyholders


Standard Life takes stake in threesixty policyholders

Base rate hits 5.5%

Pioneer publishes IP claims stats: 97% received payout in 2006

Friends Provident buys Sesame and Pantheon

FOS announces reduction in protection complaints

Capital wins £580m Resolution deal

LV= to buy Tomorrow


june 2007 policyholders


NU cuts protection rates policyholders

Kirwan replaces Walsh at ABI

Lloyds TSB paves way for sale of Abbey Life

LV= slashes term assurance rates

British Insurance launches new PPI policy

Aegon Scottish Equitable extends life cover to age 75

PPI providers still putting prices up


julY 2007 policyholders


Pioneer launches new IP plan for professionals policyholders

ABI produces consumer guide on critical illness

HBOS launches new mortgage protection plan


The year in protection agenda3
The Year In Protection - Agenda policyholders

  • Are we making progress?

  • News review

  • Views of industry experts

  • Immediate priorities

  • Conclusions and agenda for the year(s) ahead


The expert panel
The Expert Panel policyholders

  • Nearly 80% response rate

  • Respondents included:

THANK YOU!


Most significant developments comments attracting five or more votes
Most significant developments policyholders(comments attracting five or more “votes”)


Most significant developments other suggestions
Most significant developments policyholders(other suggestions)

  • Increased use of technology to improve new business application processes

  • Increased use of tele-underwriting

  • Age discrimination directive

  • Growing impact of TCF

  • Increased focus on IP

  • Providers buying distributors

  • Increased intensity of price competition

  • Swiss Re acquisition of GE

  • FSA’s ICOB review

  • Increased reinsurance capacity for guaranteed CI


Successes heroes comments attracting five or more votes
Successes/heroes policyholders(comments attracting five or more “votes”)


Successes heroes other suggestions
Successes/heroes policyholders(other suggestions)

  • ABI for new standard CI definitions

  • Virgin for “Big C” product

  • COVER for “Promoting Protection” campaign

  • Law Commission (stirring the pot on non-disclosure / claims declinatures)

  • Growth in use of “added value” benefits (Red Arc, Best Doctors etc.)

  • Direct Life & Pensions for "Intelligent Protection“

  • Scottish Re for surviving!


Biggest challenges comments attracting five or more votes
Biggest challenges policyholders(comments attracting five or more “votes”)


Biggest challenges other suggestions
Biggest challenges policyholders(other suggestions)

  • Effective distribution (focused on protection rather than savings business)

  • Managing fallout from PPI review (all products tarred with same brush)

  • Non-advised sales

  • Changing solvency/reinsurance landscape

  • Reducing churning

  • Avoiding CI definition creep

  • Reducing dependence on the mortgage market for protection sales

  • Retail Distribution Review


What could we do better comments attracting five or more votes
What could we do better? policyholders(comments attracting five or more “votes”)


What could we do better other suggestions
What could we do better? policyholders(other suggestions)

  • Recognise that a totally price-driven market is in no-one’s best interests

  • Less regulation; simpler products and acceptance processes

  • Sort TPD

  • Focus on innovation to grow market rather than chasing market share

  • Government: recognise and promote importance of protection business

  • Increase confidence by publishing claims statistics

  • Talk to each other!

  • Improve access to advice for mass market

  • Innovate on CI

  • Talk to customers!




The year in protection agenda4
The Year In Protection - Agenda policyholders

  • Are we making progress?

  • News review

  • Views of industry experts

  • Immediate priorities

  • Conclusions and agenda for the year(s) ahead


Somewhere along the way we stopped explaining insurance

Insurance policyholders

Savings

Somewhere along the way we stopped explaining “insurance”

  • There are two ways for individuals to make provision for future financial needs:

  • Which offers greater benefit to society as a whole?

  • Which should the government encourage via tax incentives?

  • Where did we go wrong?


To regain trust we must understand and manage customer expectations
To regain trust we must understand and manage customer expectations

Scottish Re consumer research* produced the following results:

  • Almost half of respondents thought life companies should not be allowed to reject a death claim if important facts were omitted when the product was taken out

  • Around one-third thought that insurance companies should always pay claims in full

  • Only one in eight supported claims being declined due to non-linked non-disclosure

  • Over three-quarters were in favour of a time restriction for investigating claims

  • Almost two-thirds felt insurers should not rely solely on customer disclosures to underwrite

* ICM interviewed a random sample of 1012 adults aged 18 plus by telephone across the UK between 3-5 November 2006. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.co.uk.


Declined claims and non disclosure are key to customer confidence
Declined claims and non-disclosure are key to customer confidence

  • Claim declinature rates due to non-disclosure are now unsustainably high

  • Consumers’ perceptions of “fairness” are not consistent with current industry practice

  • In some cases customer expectations are unreasonable, so we must communicate better

  • Non-linked non-disclosure is a particular problem which damaging the industry’s reputation

  • 5-year non-contestability might not be such a disaster

  • These problems affect the whole industry – all providers, all advisers, all products

  • The Law Commission proposals are a timely prompt for industry-wide review and action


The year in protection agenda5
The Year In Protection - Agenda confidence

  • Are we making progress?

  • News review

  • Views of industry experts

  • Immediate priorities

  • Conclusions and agenda for the year(s) ahead


Conclusions and future agenda
Conclusions and future agenda confidence

  • New business volumes are likely to increase – there is hope!

  • But not for everyone: number of providers is likely to fall

  • Key messages:

    • We must communicate the value of protection/insurance

    • We have to address non-disclosure/claim declinatures

    • (Re-)building customer trust and confidence is our biggest challenge

    • Consumers need to be convinced about the value of advice

    • We have to widen distribution, improve access

    • We need more product and process innovation

    • Industry-wide initiatives are making progress


Looking ahead
Looking ahead….. confidence

“Things can only get better”


The Year In Protection confidence

David Heeney

Chief Marketing Officer, UK & Ireland

Scottish Re

The Protection Review Conference

11th July 2007, Café Royal


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