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Evolution or revolution: do we need to shake up the provision of protection and health insurance?

Joanna Scott.jpgAre health and protection insurers ready for the “new normal”? Mental, physical and financial wellbeing is more important than ever but are products set up to meet customers’ changing needs. For the majority, awareness of the need to protect themselves against financial shocks and improve their physical health has increased as a result of the pandemic. People’s needs and behaviours are also changing, prompting a greater shift to the provision of remote and flexible services – whether that is working remotely or ordering the weekly shop. It has even impacted insurance, where some self-pay medical procedures have doubled on last year in the face of NHS waiting lists.  People’s needs will continue to evolve, but that also asks the question, are health and protection products ready to meet these needs and future challenges?

BritainThinks recently published a report exploring the challenges facing the nation which found that provision and funding of healthcare was the most important challenge facing the country today, followed by Covid-19 and poverty. Before the pandemic, our healthcare system was under pressure from rising numbers of chronic conditions and an ageing population. Now, combined with long waiting lists and economic uncertainty, partnerships between government and insurers could be a welcome solution to ease pressures.

Health tweet.JPGHealth and protection insurance products play an important role in protecting customers’ mental, physical and financial health. They provide essential safety nets - over lockdown, insurers paid over £90 million to help families to cope with Covid-19 claims - and support the health of policyholders through providing value-added services. The ABI held an event in January titled “Is prevention better than a claim?” - that is a question which is even more relevant today. While prevention is important, access to speedy support is even more crucial. This year has changed how we operate on a daily basis, from working patterns to accessing essential services like healthcare. It has shown the value in being able to access quick and flexible services, which could impact people’s attitudes towards their insurance.

In the general insurance market, on-demand and usage-based insurance products are common. It mimics the subscription-based models we use in other aspects of our lives where you can switch off access at the click of a button. It is uncommon to see this model in the health and protection market. Understandably, buying a health-related product is more complex than buying your next book, but the immediacy of these services is likely impacting customers’ needs and expectations. It is challenging with health-related products with no distinct timeframe, as no one plans to fall ill. However, could there be a blend of flexibility which still provides adequate protection?

Unpredictability usually demands flexibility, and the number of people with an unpredictable income is only set to increase. Their needs may not be met by traditional products or they may be unaware of the products altogether. The furlough scheme has brought the concept of products like income protection to many people who may previously have been unaware of the need to protect their income should they fall out of work. Alongside this, many people have become actively engaged in their health and wellbeing over lockdown. Can the industry harness this newfound engagement in health and protection, or does the market need a gear change to do so?

There could be a missed opportunity to encourage people to protect themselves and take ownership of their wellbeing. The question for insurers may be whether they make people want their products, or whether they make products which people want. In a perfect world, customers will have a choice of products which fit their needs and ease of accessibility in any way they want. These trends seems unlikely to change, so the onus is on industry to ensure customers’ needs continue to be met in the “new normal”.

Join our breakout session at the ABI’s Annual Conference 2021 to continue this debate!

Last updated 12/11/2020