Faster underwriting is the key to protection market growth
New products for renters and millennials will help expansion
New independent research1 for HSBC reveals financial advisers believe innovation leading to faster underwriting is the most important requirement in the individual protection market to help drive growth, with 50 per cent of advisers calling for the process to be accelerated.
Current events, including delays due to difficulty in securing medical reports have led many industry providers to review underwriting limits and acceptance criteria, which can cause setbacks in the policy acceptance process.
Mark Hussein, Chief Executive Officer, HSBC Life (UK) Ltd and Head of Insurance UK, said:“The insight of advisers is vital to shaping innovation across the protection industry. They understand intuitively the changing demands of customers and are all too aware of any barriers to sales. Recent events are driving a rapid evolution in sales and customer engagement and we will increasingly see how the innovative application of new technologies can break down many of the current barriers to market growth.
“HSBC Life UK continues to develop and embed new platforms and technologies to deliver even greater efficiencies in the underwriting process. These will speed-up our customer journey and the acceptance process, whilst maintaining market leading rigour in application evaluation. Our internal underwriting engine works to increase the level of ‘straight through processing’ and where customer disclosures require a fully underwritten proposition, we have a robust process in place to understand where our questions can be improved to drive-up the percentage of day one acceptance.”
However, advisers (42 per cent) also want to see a greater range of products in the protection market for people who rent homes. Long-term renting has been a developing trend and the average age of a private renter is now 40 years old2. This demographic is likely to have dependents, so it is important they have protection in place for the long-term financial security of all the family.
While advisers have traditionally approached homeowners when taking out a mortgage, there has not been the same engagement with renters. With the value of so many protection products based on an outstanding mortgage value, there is an opportunity for new solutions designed specifically for this audience.
Almost four in ten (39 per cent) advisers believe the market for individual protection needs to evolve with the introduction of more products designed specifically for the millennial audience. A further third (32 per cent) of advisers believe there is a need for products offering enhanced mental health coverage and 30 per cent think there is a need for products that offer short-term cover.
Table One: Product innovation financial advisers believe is necessary in the advised individual protection market
| PRODUCT INNOVATION MARKET | PERCENTAGE |
| Faster underwriting | 50% |
| Products suitable for people who rent homes | 42% |
| Products targeted at millennials | 39% |
| Products which provide cover for mental health issues | 32% |
| Products which offer short-term cover | 30% |
Advisers highlighted market opportunities for providers that can offer value added services along with the traditional product suite. More than a quarter (29 per cent) of advisers believe clients would be more interested in protection services if they offered access to additional services such as helplines or virtual GPs.
Speed of the purchase journey is a consideration, with a quarter (24 per cent) of advisers stating the time it takes to secure a policy is too long and can discourage applicants. They also highlight the public too often still think employers’ death in service provision would be sufficient to protect their family should the worst happen, though in reality it would unlikely provide adequate cover, with 19 per cent of advisers saying it is a barrier to sales.
ends
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Note to editors:
1 Research conducted for HSBC Life (UK) Ltd March 1st and 25th 2020 using an online methodology by independent research company PollRight among 108 independent financial advisers focusing on protection sales.
About HSBC Life (UK) Limited
HSBC Life (UK) Limited is part of the HSBC Group, one of the world’s largest banking and financial services organisations. HSBC Group serve more than 40 million customers worldwide through a network that covers 64 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa.We aim to be present where the growth is, enabling businesses to thrive and economies to prosper, and, ultimately, helping people to fulfil their hopes and realise their ambitions. HSBC Life (UK) Limited is a subsidiary of HSBC Bank plc and was founded in the UK in 1988. HSBC Life (UK) Limited offers a range of insurance services to meet protection and wealth management needs and help clients to manage, protect and grow their wealth. Our services and solution are available through HSBC banking channels and selected third-parties, including financial advisers and aggregators. For more information on HSBC Life (UK) Limited range of services go to https://www.life.hsbc.co.uk/ and for more information on HSBC please go to https://www.hsbc.com
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