Debbie Kennedy, head of protection at Royal London, shares her views with Ronan McCaughey on ways to grow the protection market; the debate about double commission for advised sales; and what Royal London is doing to encourage product simplicity and digital innovation
Life Insurance International: Why is Royal London bringing its UK intermediary protection businesses under a single brand? For example, Bright Grey recently rebranded to Royal London
Debbie Kennedy (DK): "It brings us all together behind the Royal London brand and really emphasises that we are this mutual company.
What we are creating under Royal London will build on three basic principles:
That is being easy to do business with; providing cover that matters; and importantly for us ensuring we have a long term relationship with advisers.
I think what has been really satisfying is that we’ve had great feedback from advisers and during this year’s move to the rebrand, we have seen our business increase and we have increased the percentage share of the markets we are active in by 3%.
LII: What is Royal London doing to engage with the mass market of UK consumers who still do not have life insurance?
DK: I think there truly needs to be a change of focus if we want to see growth in the protection market.
We have got to help advisers serve that mass market so that advisers do not just serve the needs of affluent and wealthy people.
I think there will still be an important role for advisers because they do identify protection needs and they convert those into protection sales.
To help grow the mass market, I think we will see a growth in the remote and aggregated channels, and to help with that I think we need simpler products.
I also think advisers need help because they will need a model that serves the mass market. We have got to move away from making products complex and simplify what we are doing and address customer needs.
LII: How is Royal London making its products simpler?
DK: One of the things we have really focused on this year is cover where it counts and this really applies to critical illness. I think critical illness is a product that has almost lost its true relevance from how it first started.
Some propositions are very complex for advisers because they have partial payments and severity payments that come out. I think taking someone through that and making sure you give them a product that will deliver for them can be difficult.
We have focused on the critical illness conditions that really count and customers are claiming on.
We are really looking at those conditions to ensure our definitions work and we have clarity in what we are covering.
Advisers often shy away from protection because of the underwriting as they don’t know whether it’s will take weeks for an insurance plan to go through. So, if we can help them with that process that’s important.
Royal London is one of the launch partners with UnderwriteMe and that is really important because we are letting customers and advisers compare costs from a range of insurers.
LII: An industry talking point in the UK is whether there will be double commission for advised sales. What is your view?
DK: I’m not sure I’d say there needs to be double commission. We do have to look at commission though and reconcile where an adviser has had a complex sale. It’s a subject that probably needs a real review.
I also think to grow this market we need to make it easier for non-risk specialists to come in and sell protection. So, if you are an investment adviser, how can we make it easier for the adviser?
LII : How can the UK protection market grow when the number of financial advisers are dwindling and bank branches are also increasingly being closed?
DK: Some adviser numbers are dwindling, but I do think there will be more new advisers coming through.
That is also why insurers like ourselves have to focus on digital innovation.
LII: How is Royal London planning to make life insurance more convenient and accessible? Will this involve technology such as mobile apps?
DK: We have a mobile friendly website and are looking at apps. As a group, we have said we need to ensure we bring this innovation into other channels as well.
We are also looking at ways of using different sources of data in lieu of underwriting so that we can use other proxies. There have been a number of pilots which are really encouraging.
I cannot go into it further at this stage, but it is something we are developing.
We are absolutely now looking at FinTech and how we could use analytics better. I think if we do that we can make people aware of their protection needs, such as when they are going through a mortgage.