Roger Edwards: Protection is back on the road to simplicity

By Roger Edwards

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Jul 25, 2018
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The day on which my career as a marketer in financial services started back in 1987 also happened to be the day the stockmarket crashed.

The people at the investment company taking me on as a graduate had no time to welcome me with a chat and a cup of coffee. They were trying to man the phones as the switchboard went into meltdown. Panic-stricken policy holders wanted to know how little their bonds were now worth, or whether their unit-trusts would ever recover.

My new boss dumped me in a quiet corner with a pile of product literature and told me to get reading. That’s all I did for the first week. I learned about simple term assurance and noted the application form consisted of just four pages. Protection was a whole lot simpler back then.

Of course, the stockmarket crisis passed and the company then got me started on some real work. Much of that involved adding complexity to those protection products.

In the late 1980s we brought in flexible whole-of-life plans. They had investment links, reviews after 10 years — then again every five — variable sums assured and longer, and six-page application forms.

By the early 1990s everyone was getting excited about a new product idea called ‘Dread Disease’. By the time we added it to our flexible whole-of-life plan, the market had decided to award the product the decidedly less alarming title of critical illness cover.

A Scottish company came along, bought my original employer and whisked me up to Edinburgh in the process. I still live there to this day.

We launched the first ‘menu of benefits’ product in the mid-90s (and yes, the idea did come from a lunchtime trip to Burger King).

I remember presenting the menu to a group of advisers in London. After working through a deck of hundreds of slides, one stood up and slow-clapped me.

“Congratulations. You’ve just launched the most complicated product I’ve ever seen,” he said.

That complicated menu product went on to dominate the market for the next few years and set a benchmark for other companies to follow.

Compared to the products we have today, though, that original menu was simplicity itself. Now we have more menu options and critical illness cover lists running into hundreds of pages. Today’s application forms, for those that still have paper, are 32 pages or more.

The mood in UK protection is upbeat and sales are growing. Some companies are continuing to add more complexity, conditions and options, and are being successful as a result.

But we’re also seeing another trend: simplification. We are seeing companies launch simpler products, such as AIG Life’s Key 3 critical illness product which covers just the top three conditions, or Exeter Managed Health’s product, aimed at people with diabetes. We are also seeing shorter application forms.

Are we in a cycle? One that has taken over 30 years to complete?

We have gone from simple products to much more complicated offerings, and now we are heading back to simplicity. It’s fascinating to look at this progression. I look forward to seeing where the road to simplicity might take us next.

Roger Edwards is managing director of Roger Edwards Marketing and marketing director of Protection Review

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