4. Savings?
What’s more 27% of Britons have
no savings whatsoever
Reality check: Source: ING Consumer Savings Monitor
Q4 2011
It is estimated that the average person’s
savings is £2040 as at the end of Q2 2012.
It may sound like a large amount to some
clients but £2040 is only 46 days worth of
savings.
If your clients were unable to work for six
months due to ill health it would leave most
people short on savings*
Source ING Consumer Savings Monitor Q2 2012
*based on average income / 1.3 x average take home pay
7. The plug
Loss of income…
Pension would stop…
Use their savings…
Can’t pay the mortgage…lose their home
Life goes down the plughole…
• A plug to stop that happening
9. Which job
Imagine you were made redundant & looking for a new job
You saw an advert in the paper for 2 positions
Both jobs are ideal with exactly the same packages
Except for ONE thing
Job A pays around £35,000pa
Job B pays £34,600 plus,
if you were sick, 60% salary
until you got better or retired.
….which would you take?
10. The vicious circle
You fall ill / injure yourself
You take time off to recover
You work too hard to catch up on
workload or to recoup lost income
Income not
protected Debts increase / credit rating being
affected
You return to work too soon
11. ‘G’ day…no sex please we’re European
From 21 December
2012 insurance will
cost the same for
males and
females…
The cost of
protection is set to
change
Change
=
Opportunity
12
12. The Combined Impact of Gender and I minus E
From 21 December Males Females
Product Currently… The impact of Gender and I minus E ?
Income Women pay 65%
Protection more than men +20% -28%
Combined Men pay 10%
Critical Illness more than women*
+ 6% +16%
Men pay 20%
Term more than women + 3% +22%
Underwritten Men pay 20%
Whole of life more than women + 2% +20%
* In some cases, women pay more than men
To get us started, let’s do a quick warm up looking at what do your clients currently insure. So here we have a few, the car, the house, the contents, pets, mobile phones. A key one…loss of income.Sometimes its even the most unusual things that people will insure…Yes it does exist, there is a policy underwritten by Lloyds of London that can cover you against alien abduction. So what percentages of people do we think have these things insured?So here we have it. 61% insure their holiday; 78% insure their house contents. 71% of people insure their car. But what about loss of income? Well look it’s only 9.4%! That’s less than half the percentage of people who insure their pets or their mobile phone!Okay so how many policies do we think are in existence today for alien abduction? Well the answer is [last reveal] 40,000. Yes, honestly…”
As illustrated on our last slide, our claim stats indicate that on average a client will claim on an Income Protection policy for 7 years. If that client does have a shorter term product in place to cover their income, where is that foundation block when the short claim period ends yet they are still unable to work.It is also worth noting at this point the difference between what a client would be covered for on an income protection product compared to perhaps say a CI product. Our claim stats again illustrate that a large proportion of our IP claims are for disclosures such as mental disorders or musculo-skeletal disorders, both of which would not be covered under a CI policy.
When it comes to matters of sex, some of our European partners are renowned for their more liberal approach, romanticism, guile and prowess. Yet, interestingly, the EU Gender Directive flies in the face of individuality and sexual expression. From 21 December – commonly termed ‘G Day’ – men and women have to be treated the same when it comes to insurance premiums.There is virtually no chance that it will be derailed, delayed or changed. From G-day, insurers will no longer be able to offer genderspecific rates for many classes of protection.But with change does come opportunity as we’ll cover in a moment
This table gives you a flavour of how prices might change post G day. It comes with caveats, lots of them. It’s not an exact science and will vary by provider and there are variations even within classes of business, but hopefully it serves as a useful guide.The cumulative effects of Gender and I minus E are likely to result in the cost of life and critical illness increasing for most people but to what extent, will depend on their gender (amongst other factors). Income Protection: When it comes to income protection, before G Day, men could expect to pay around 40% less for cover compared to women. So, post G Day we can expect the cost of income protection to come down for women and rise for men. Critical illness: For critical illness cover (often combined with life cover), it’s a little more complicated. Before G Day on average, women pay around 10% less than men – but in some cases women pay more. So, on the whole, the Gender Directive will result in women paying more for critical illness and men a little less. For some though there might little noticeable change and for younger and older men the cost of critical illness will go up. Life insurance: Before G Day women typically pay on average about 20% less for life cover than men. So, on the whole, the Gender Directive will drive up the cost of life insurance for women, and men will pay less. Joint life cases: We can expect little change for underwritten whole of life cases. However, if here is a wide age gap between the lives, then costs could go up or down depending on which person is the older and the type of contract.