Protection for all, inclusion for all

Why should people value insurers? The most common response is because they pay claims. But is this enough? Don’t the public expect us to pay claims, in the same way that they expect that – if they ask for a cup of coffee in Starbucks -- that’s what they’ll get?

Sian Fisher, CEO, Chartered Insurance Institute

I see claims as a hygiene factor. It’s something which the profession has to do well, but it’s also something which is assumed by our clients. We shouldn’t expect it to generate a round of applause. To win the confidence of the public, we have to do more.

The CII’s royal charter instructs us to ‘secure and justify the confidence of the public’ in insurance. We are a professional body that sets standards and certifies practitioners. The most important standard is to start with the customer and their needs. What made the arrival of Starbucks stand out to the consumer wasn’t that they sold coffee, but the choice they gave their customers. Before they hit the high street, the options were basic. Black or white? One lump or two?

What does this mean in insurance terms? We too need to acknowledge that people live unique lives and that they increasingly expect products and services which are tailored to their personal choices. Take travel insurance for example, a product which has been around for decades. People want to be covered if their holiday plans include extreme sports and they want to be covered if they have survived a serious disease.

Insurers are currently showing high levels of ingenuity in identifying ways to cover new risks. They are recruiting experts in issues like cybercrime and investing heavily in developing new products. I believe they are doing a great job. However, I’d also like to see us to apply more ingenuity to traditional policies. To reach for the ‘too difficult pile’ – to the people who end up lost in exclusion clauses because they don’t entirely conform to the terms of a policy.

Customers – particularly millennials – expect this level of customisation, but it’s also necessary to review traditional products to see if they are still fit for purpose.

How do pension products work for the third of marriages that end in divorce? How do home policies work when millennials may only be able to pay the mortgage by renting a room? How do travel policies accommodate the million customers we expect to have Alzheimer’s by 2015? There is clearly an opportunity here for insurers to create tailored products. And I believe that, as a profession, we can demonstrate our relevance and value to society by making sure that no group is excluded from buying an insurance policy. Insurance is, after all, a force for good, putting people’s lives back together.

These gaps have a devastating impact on individuals, but they also harm wider society, by increasing the burden on the welfare state. The extent to which insurers offer additional protection to the state has changed over the past century.

Do I think that the industry should replace the welfare state? Not at all. But looking at ways in which private insurance can augment the state is not the thin end of the wedge. Over the past century, the space where state protection ends and private cover begins has constantly ebbed and flowed. That will continue, particularly given the demographic changes in our society.

There are many areas where we can make a positive difference. For example income protection schemes, where a person receives financial cover if they lose their job due to serious illness. British people overestimate the state support they are likely to receive and underestimate their likelihood of falling ill. Group income protection policies currently save the taxpayer around £192m a year and we believe that there is room for substantial growth in this area.

British insurers are looking for growth in overseas markets. But there are also many opportunities to enlarge the insured world here in the UK by plugging these exclusion gaps. This will make our society stronger and ensure that as a profession we remain relevant. Insurance is, after all, a force for good, putting people’s lives back together. There should be inclusion for all.

Our value increases when we refuse to accept someone is ‘too difficult’ to insure. For more information please visit