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Justin Taurog: "Our industry needs to challenge the status quo"

Published: 13/06/2024

Against a backdrop of changing consumer needs and wider trends impacting our world, genuine product innovation is what’s needed to move the protection industry forward, writes Justin Taurog, VitalityLife Managing Director.

In recent years, the protection landscape has fundamentally shifted. The pandemic followed by an economic crisis have presented both challenges and opportunities for our industry.

A lack of financial resilience for many households has heighted the need for protection, while there are growing numbers of people living with long-term illness.

Meanwhile, medical advancements alongside pressures on the NHS and changes in the way we live and work are all impacting products we offer.

"By seamlessly integrating a range of rewards and benefits into the lives of client's, members saved £82m through the Vitality Programme in 2023"

- Justin Taurog, Managing Director, VitalityLife

However, despite the obvious need for protection and health challenges we face, there’s still a significant protection gap in the UK.

Positive signs

There are plenty reasons to be positive. Our own sales experience over the last 12 months fared well despite economic headwinds, with a 10% increase in protection business over that period.

Income protection is seeing significant growth in the market and the outlook from advisers for the year ahead is favourable.

At the same time, Consumer Duty has the heightened focus on delivering ‘good’ client outcomes and avoiding foreseeable harm, which places a renewed emphasis on the importance of protection advice alongside other areas of financial planning.

We also see the growing need for advice to be consultative, with more focus on addressing client needs holistically to properly evidence quality and value, not just make recommendations based on price.

Rethinking protection

Growing the market also requires our industry to rethink protection and challenge the status quo, by offering more relevant, comprehensive and flexible cover for modern-day needs.

Too often, traditional products do not adequately cater to the needs and expectations of today’s consumer and advisers. By challenging this, however, we can deliver better client outcomes and move protection forward for the next generation.

For example, our Serious Illness Cover provides unparalleled long-term coverage that allows for multiple claims and severity-based payments, ensuring that even after a claim is paid, the client isn’t left uninsured and uninsurable.

In 2023, 1 in 13 Serious Illness Cover claims were paid on plans that had already made a claim, whilst 1 in 6 claims were for conditions not covered elsewhere on core critical illness plans1.

Real life stories like Hayley’s help to bring this to life and highlight the difference quality cover can make.

Meanwhile, options like our Dementia and FrailCare Cover – which now insures over 100,000 members – and LifestyleCare Cover provide a unique solution to the growing problem of later life care funding.

With Income Protection Cover, we can not only ensure cover is relevant to changing ways of working. Through more flexibility and greater levels of cover certainty, we also play a proactive role in keeping clients fit and healthy in the workplace, as well as getting them back to work when they are not with PMI-powered pathways.

More than just peace of mind

Customers these days also expect much more from products than the intangible peace of mind that life insurance offers, which isn’t always enough to make people want to take out cover.

Traditional protection still treats risk as static – with cover serving as little more than the promise of a pay-out in exchange for a set monthly premium.

This approach is also contrary to the nature of non-communicable illnesses – such as heart disease, stroke, cancer and diabetes – which are determined largely by modifiable behavioural choices that we make over our lifetime.  

Instead, through Optimiser, which is unique to us, members get significant upfront savings - £43m in 2023 – while trebling their level of engagement in healthy behaviours, because it directly impacts the premium they pay each year – generating significant savings over the duration of their plan.

While paying claims remains at the heart of what we do – totalling as much as £117m in 2023 – we also see the opportunity to prevent them too, while also delivering more immediate value in a way that clearly resonates with clients.

This isn’t just good for them and us, but it also benefits advisers who have more engaged clients that are more likely to take out higher amounts of cover and less likely to lapse their plan.

Cover that’s more engaging

All this makes our unique shared-value model a key differentiator in the market. Through the Vitality Programme, we can drive never-seen-before levels of member engagement within a protection product, which helps clients generate upfront, tangible value from their plans long before they need to make a claim.

By seamlessly integrating a range of rewards and benefits into a client’s life, served-up through an intuitive digital offering, members saved as much as £82m through the Vitality Programme in 2023.

And it’s not just about financial value. This is also helping people to live longer, healthier lives. Engaged members improve their mortality risk by up to 49% and their life expectancy by up to 5 years2.

Ultimately, we know that for any adviser and their client, the moment of truth is a when a claim is paid. As our latest VitalityLife Claims and Benefits report demonstrates, Vitality is there for clients when they need us most, and from day one. Our mission is to move the industry forward, help you grow your business and close the protection gap as a result.

To find out more about how Vitality supported clients in 2023 through market-leading protection cover and health and wellbeing benefits, view and download our latest Life Claims and Benefits Report.

Where to next?

  • Three real-life claims you might not expect to be paid

    VitalityLife Managing Director, Justin Taurog, talks us through three real-life claim case studies to remind us of the power of comprehensive severity-based cover.

  • Protection advice has never been more needed

    With UK households under-protected, the role of advisers in delivering thorough, comprehensive protection advice has never been more important, writes Vitality Adviser Editor, Rob Harvey.

  • Insights Hub

    Our Insights Hub brings your our range of adviser content - from video series to articles & blogs.

1. VitalityLife Claims and Benefits Report, 2024
2. Based on engaged members who earn 21+ activity points a week throughout their lifetime