Table 4 bolsters Mr Shaw’s claims: many firms saw the number of claims rejected fall between 2017 and 2018. The provider with the highest percentage, however, witnessed an increase – Royal London’s rose to 27.8 per cent from 27.1 per cent. To put this into perspective, the company with the second-highest claim rejection percentage, LV, declined 12.8 per cent. The most common reason for refusing claims was non-disclosure.
The final table contains one of the survey’s most significant statistics. Despite the perception that more advisers are shying away from protection policies, Table 5 shows that intermediaries remain the most popular business avenue for IP providers and, for many companies, their sole source.
Shout
The future of IP certainly looks more promising than in yesteryear, with the industry now looking to build on its recent success and harness the product’s change in sentiment. But there are challenges for the sector, one of which is trying to encourage take-up from women and younger workers; encouragingly, data suggests there is a demand.
A survey by Canada Life, which polled 1,002 working adults, found that 28 per cent of millennials (those aged 18-34) said group IP would be the best form of protection their employer could provide. This compares with the figure of 17 per cent across all age groups, with only 13 per cent of over-35s recognising its value.
Steve Bryan, director of sales and marketing at The Exeter, says the tide is turning and points towards other “encouraging” statistics. “Female employment rates have reached a record high, and the number of people in self-employed occupations also continues to rise,” he says.
“IP policies have evolved by providing greater flexibility and a wider range of product features to meet the needs of our changing society. While more could be done to increase uptake among women and younger workers, the industry is headed in the right direction. In the first quarter of 2019, 40 per cent of IP policies were sold to women, while the number of people buying the product aged under 30 has increased by almost 8 per cent since 2015.”
Nick Telfer, product and marketing director at British Friendly, says: “Although much has been achieved, there is more to do to make the product more relevant and accessible. We are seeing a steady increase in the numbers of people renting or working more flexibly as contractors for whom the traditional IP proposition may not be suitable.
“Above anything else, we must explore new product designs and underwriting techniques so we can cover more people with existing medical conditions.”
According to Mr Bryan, both employers and intermediaries have important roles to play to get the message out to the general public about IP’s value. He adds that providers, too, are not exempt from responsibilities: “Insurers need to continue to highlight the real-life value that IP offers through customer stories.
