The Problem with Selling Protection Insurance

In 2018 Marsh, an insurance broker teamed up with Munich Re and figured out that there might be a market for a new insurance product for businesses. They created a policy which would pay companies if they suffered as a result of a Pandemic.

Yes, that’s right, it would have paid out for the loss of earnings with COVID-19, and saved plenty of companies from catastrophic damages.

It failed.

Customers felt the premiums were too high.

Now, these firms probably paid more in the same year on maintaining their HQs. I would imagine the cost of upkeep for the plants in reception alone was more than enough to cover the cost. They’re reeling now.

I’m not sure if it was sold well enough. Premiums and perceptions of too much money, are merely a reflection of value. The firms didn’t see the value of the policy. They would now.

That’s the point. If the super salespeople at Marsh had painted the picture of 2020 vividly enough that the buying team could see, feel and understand, chances are they would have bought the policy. But they didn’t.

It's the same with life and health assurance for personal clients. Naturally, the premiums are far less, but as a proportion of the client’s monthly costs, it probably represents a fair chunk. The same as their Sky and Disney subscriptions, or their monthly season ticket to watch their favourite Premiership Football team. Or the cost of 4 bottles of decent plonk for the Sunday Dinner table.

We all have choices where we spend our money, and many people do not prioritise the premium for protection insurance unless the law requires it.

The answer is to paint a picture vividly enough so the client can see, feel and believe it. In the old days, we would use disturbance tactics. These just don’t cut it nowadays, but the principle is still relevant. Use methods to paint the picture and let the client see it, feel it and agree with it.

Here are some more contemporary ideas to help you sell protection:

  • Coaching comes to mind. A good coach asks questions, listens to the answers and responds or asks further questions. A financial coach asks questions around a model which has a goal at its heart. The goal is continued prosperity or happiness. This often involves family, lifestyle, security and…wait for it….cash. Asking questions around a lifeline is very productive. Finding out what the customer wants out of life and then discussing what might get in the way. Early death, illness, accidents and so on cause prosperity and happiness to come to a grinding halt. Money can alleviate some of the traumas, not all, but it can soothe the blow. Good coaches use questions to draw this thought from their customer. They don’t tell them; many financial advisers tell them. In one ear and out the other, do you recall when your parents told you so?
  • Ask casually and with full rapport, what would happen if these things happened to them. Be prepared but test the water first, to probe further on their answer. Reveal the discomfort. We used to call this disturbance techniques, a little old hat nowadays. However, done courteously and subtly, it can still reveal the need strongly enough for the client to reduce their online streaming subscription and find the money to pay the regular premium.
  • Videos such as the Widows Story or any number of mini-dramas that insurance companies have on their YouTube Channels work as well. Whether the client will watch them or not, is debatable. They’re a little corny nowadays. Perhaps build a picture of a favourite TV series or drama that they watched on TV that had a similar story. Or Coronation Street or East Enders.
  • Logic can work, but it is devoid of emotion. 4 out of 5 people will die leaving unpaid bills; 9 out of 10 cat owners said their cats preferred it. Insurance Companies have reams of these things, all available in glossy form as well as digital.
  • Believe yourself. I’ve carried protection since the tender age of 21, took £750K worth of life cover as my three children grew up, maintain income protection until the age of 70, have had pet insurance, unemployment insurance and flood. I still pay over £500 monthly for life and health protection as I still have a jumbo mortgage and bills that require my income.
  • Package it up. Make it, so this is standard practice, but don’t conditional sell or even perceive to do so. Make it part of your sales process. Have a 20-minute video meeting purely to discuss protection, early on too, before any mortgage has progressed.

The FCA has never had a complaint, do don’t feel you’re overselling protection. It has to be done right. Maybe the Marsh sales team had a tricky job to sell Pandemic Insurance; I bet it would be an easy sale now.

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