Ever tried to build a sandcastle on the beach with an incoming tide? No matter the walls or moats you place round the castle, we all know the tide eventually wins. When it comes to online life insurance, the same is true. There’s no holding back the incoming tide. One can use this analogy when you read all the winging going on by financial advisers in relation to CIGNA’s new online income protection offer.
As usual, there are wails of protest emerging from financial advisers. “Selling income protection without advice is irresponsible” “…outrageous…only a matter of time before the first claim arrives at the insurance ombudsman door”. If you would like to see more read go to Good Returns
But what is all this protest based on?
Is it reasonable for financial advisers to assume consumers can’t read and understand a policy document? Is it reasonable to believe the services of a financial adviser should be thrust upon consumers who prefer to manage their own financial affairs? Is it not short-sighted and arrogant to believe the insurance industry will be unaffected by the internet? Is it reasonable for advisers to suggest they alone have a plethora of options and tools available to determine the consumer needs, and that they alone are better suited to find the best fit?
Agents appear to find the internet a convenient place to voice their opposition and find leads, why the resistance to use the internet as a knowledge base and purchase tool for consumers? Truth be told, they see it as taking the crumbs off their plate. Unfortunately, that's competition, and we all know the benefits of competition for the consumer.
Five years ago Pinnacle Life was a trail blazer; today Pinnacle has many competitors in the online space. Any financial adviser who believes that selling life insurance is strictly their domain is living in a stand castle. Unless they start to reposition their offerings and deliver value add, the tide will wash many of them away.