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Justin Taurog: The protection landscape has fundamentally shifted

Published: 06/09/2022

Our intention was to turn traditional life insurance on its head when we entered the market in 2007. Nowadays we’re pleased to see the protection industry is a very different place, writes Justin Taurog, Managing Director for VitalityLife.

Since we introduced our Shared Value model almost 15 years ago, we’ve seen protection propositions evolve to become far more than just insurance.

But promoting and supporting better client health is one thing. Changing behaviour and sustaining it over the long term is another. That’s why we believe there has been a fundamental shift in what’s possible within protection. Achieved by incentivising members to lead healthier lives and through presenting evidence that shows it actually works.

The introduction of Optimiser in 2013 has been critical to this. Even now, Vitality is still the only provider which allows members to pay up to 40% less for their life cover if they make healthy living choices 1. With premiums lower, Optimiser enables clients to take out more comprehensive levels of cover - or more than one product - achieving our core purpose of not only making our clients healthier but ensuring they’re better protected as well.

“Whether it is preventing claims from occurring in the first place, delivering clients genuine value from day one, or paying out when it’s needed most, this is all part of the important journey we are still on as a provider”

- Justin Taurog, Managing Director, VitalityLife

Value for money

The current economic situation is creating a double-edged sword for protection advisers. On one hand, clients are acutely aware of the need for financial resilience. But on the other, they have become much more conscious of what they are spending.

Best-in-class comprehensive cover that provides tangible value – long before a claim is needed – is therefore more important now than ever. Especially if premium costs can be kept lower and money can be saved through rewards and benefits, keeping clients engaged in a way that means they are far less likely to lapse.

In 2021, we saw our Platinum members on average save 60% of their annual premium through discounts and rewards from our partners. Simultaneously, our engaged members with Optimiser were 30% less likely to make a life insurance claim and up to 39% less likely to lapse their plan than those without Optimiser. As we also reveal in our latest Claims and Benefits report, our members have benefited from £44m in lower premiums during 2021.

Shared Value

By keeping clients happy and healthy – and less likely to claim – we can share the value with them though things they can actually enjoy: here and now. Because everyone wins, we call it Shared Value Insurance.

Last year alone, we helped our members understand their health better through almost 380,000 health assessments. They also got healthier through more than 1.7m gym sessions, almost 815,000 mindfulness sessions logged and around 60,000 discounted activity trackers being awarded.

Moment of truth

But if a claim does need to be made, our market-leading cover is there to support them at the moment of truth. We paid 99.8% of Life Cover claims last year – a total of £54m, £5.7m of which was for Covid-19.

For Serious Illness Cover and Income Protection Cover, we settled 91% and almost 98% of claims respectively. Out of our total £82.8m worth of claims in 2021, we paid £27.9 out for Serious Illness Cover, of which 1 in 8 wouldn’t have been covered by a typical critical illness plan.

Whether it is preventing claims from occurring in the first place, delivering clients tangible value, or comprehensively paying out when it’s needed most, this is all part of the important journey we are still on as a provider – and we are grateful to all advisers who are on it with us.

We explore all our 2021 claims and benefits engagement data in depth in our Life Claims and Benefits Report 2022. If you haven’t already, you can read the report in full here.
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1 All data is taken from the Vitality Life Claims Insights Report 2022.