Making a racket about protection

How can we grow the protection market? There has been a lot of noise around attempts to answer that question, with firms looking for a big idea, ranging from a Government-backed system to some sort of group cover attached to Nest and auto-enrolment. By all means, the big firms should keep looking, and try to convince policymakers.

But what about considering some ‘added-value’ ways of increasing the protected population at large?

Perhaps we should consider attaching protection insurance to premier banking products and rewarding loyalty. After all banks provide travel insurance, often doubling up on existing cover. Why not give people something they know they should have? Alternatively could some life insurance not come along with supermarket loyalty cards as in ‘if you continue to do your weekly shop with us this year, we will provide you with life cover’.

More controversial, but well worth a thought, could life cover form part of a credit card package? This would have to be dealt with a little more carefully, given the obvious problems with PPI. But this life cover would not be linked to the loan. It would simply be linked to the decision to choose a particular brand.

Of course these alternative channels didn’t really work for stakeholder pensions. The idea suggested at the time, even by ministers, was that customers might put their change from a supermarket till towards their retirement. That was always probably a bit of a pipe dream and of course for most people it wouldn’t have bought them much pension. Then again it was tried out before the loyalty schemes really got in their stride. It certainly pre-dated Nectar. Loyalty schemes these days now provide the most extraordinary reach.

I appreciate this isn’t the whole answer. For tailored protection, consumers will always be better going to their adviser. Others will probably always go to the comparison websites. But it could help extend the range of people who have some cover. They might even appreciate it more than the benefits they get at the moment, it would help them and their families in a crisis, and it would grow the market.