Independent analyst Defaqto's annual critical illness report: "Critical Illness 2008 - Critical time for critical decisions" examines the current product offerings against a background of economic uncertainty.
The credit crunch traditionally favours the resurgence of critical illness business; but because much of the business is linked to mortgages, which are in sharp decline, the outlook is less certain.
The report reviews the developments in the critical illness arena over the last year and puts the spotlight on the current products.
Defaqto believes that the current situation provides the unique opportunity to develop the critical illness market.
The report has key messages to insurers;
- You need to innovate more now.
- This product is sold not bought, so better marketing is needed which consumers can understand.
- Consumers do not trust the industry to pay out on claims, and the industry does not trust consumers to fully disclose material facts. This must be overcome in order to restore confidence.
- Stop focusing on who offers the lowest price. The consumer may get the cheapest cover, but that may not be the most appropriate policy with sufficient cover for their needs.
- Stop blaming the media, advisors, government and customers for deficiencies in your products, service and claims handling.