bankhall conference 2009 - scottish provident

Aimed at Intermediaries and Investment Professionals only

“Events, dear boy, events”

Peter Fox

Business Development Manager (North)

Agenda

01

02

03

March of the medics

Regulation – strangulation or liberation?

Critical Illness – ABI Statement of Best Practice

04 Perfect timing?

MARCH OF THE MEDICS

A growing need for critical illness insurance

• The “Cyberknife

• The i-snake

• The Da Vinci Robot

• Survival, choice and cost

ABI – CRITICAL ILLNESS STATEMENT OF BEST PRACTICE

2009 - Minor procedure?

• Improvements in clarity for: Terminal illness

Cutaneous lymphoma

Parkinsonian syndromes

2009 - Major surgery!

Total Permanent Disability (TPD)

• Now covered by most CI policies

• No model definition

• Each insurer uses its own definition

• Range from being permanently unable to:• return to the person’s ‘own’ occupation or,• ‘any’ occupation,• or unable to perform a defined number of specified tasks

Major surgery!

Total Permanent Disability (TPD)

• TPD claims account for around 3%

• 55% of these are declined

• TPD accounts for 35% of complaints to the Financial Ombudsman Service (FOS) about what is covered under CI

• consultation included proposals for the Statement to suggest that TPD, in any current form, should not be included within CI policies

ABI Critical Illness SoBP Consultation Paper 2009

Total Permanent disability

TPD may be replaced by 10 new definitions• Cardiomyopathy – resulting in a marked loss of the ability to do

physical activity

• Complex regional pain syndrome (CRPS) – with clinical symptoms lasting for at least 12 months

• Chronic severe rheumatoid arthritis – resulting in a loss of the ability to do specified physical activities

• Loss of a hand or a foot – permanent physical severance

• Respiratory failure – resulting in breathlessness even when resting

Total Permanent disability

TPD may be replaced by 10 new definitions• Severe brain damage – resulting in permanent symptoms

• Severe Crohn’s disease – with symptoms that have not responded to optimal therapy

• Severe specified mental health conditions – causing an in-patient stay of at least 8 consecutive nights

• Specific surgery for severe back and neck conditions

• Loss of the physical ability to look after yourself

Total Permanent disability

• The biggest change yet

• Complexity vs. “simplz”

• Cost neutral?

• Cost of implementation...and you want it when?

• Would sales increase?

• Breaking the occupational link – “Let me through, I’m a doctor!”

TPD - issues for advisers

• Be aware, be ready to explain and advise – compare time investment to exam study requirement!

• What happens if a provider retained TPD and the new definitions?

• How are you selling it?

• Do you describe it as a “catch all”?

Ah, isn’t he cute?

• Cuddly bundle or predatory killer?

• Look more closely at the claws

• The threat of the ‘net

• The threat of “commodity” products

REGULATION – STRANGULATION OR LIBERATION?

RDR – nothing to see here, people!

• We’ve escaped unscathed...or?

• FSA expected to indicate their expectations

• Concern about a protection commission “gold-rush”

• Is that realistic?

RDR

• Checks to ensure no commission bias

• One remuneration discussion?

• Greater demand for nil-commission

RDR

• A prediction: 2012 – commissions still embedded

• Would your clients consider paying a fee/retainer for protection advice?

• If not then this might be another push towards the internet

• Consider how to position and demonstrate value of advice – knowledge is the key

PUSHING ON AN OPEN DOOR

Too expensive?

Scottish Provident’s Self Assurance: Death or Earlier Critical Illness prices.

Female Non-smoker, Age 50 Term 20, £250k Decreasing @9%, Gtd Premiums

Source: Scottish Provident September 2009

• The one market crying out for attention?

• Where 2008 did not affect the fundamentals

• A growing need for informed advice

• Make it personal

Call to action

Important Information

Scottish Provident is a division of the Royal London Group which consists of

The Royal London Mutual Insurance Society Ltd and its subsidiaries. The Royal

London Mutual Insurance Society Ltd is authorised and regulated by the

Financial Services Authority No.117672 and is registered in England and Wales

No.99064. The registered office is 55 Gracechurch Street, London, United

Kingdom EC3V 0RL.