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Justin Taurog: Why now is the time for next generation insurance

Published: 28/02/2023

At a time when the UK is facing numerous social challenges, from the ongoing cost-of-living crisis to immense pressure on the NHS, there has never been a more relevant time to go above and beyond the scope of traditional insurance, writes Justin Taurog, Managing Director, VitalityLife.

Individuals and households across the country are seeing their financial resilience being tested, while the health and wellbeing of our nation is still under immense strain. 
At the same time, advances in science and technology are transforming our everyday lives and driving innovation, especially within healthcare.

“We’ve seen some product development in the life insurance market in recent years, but traditional forms of protection have stood still,”

- Justin Taurog, Managing Director, VitalityLife
For most insurers, risk is still largely assessed at the outset of a policy and treated as static. Clients only tend to interact with their insurer when something bad happens, and the individual, changing needs of a customer are largely ignored over time.

Given the complex world we live in today, this approach is no longer enough. If the industry is to grow the protection market – and ensure cover stays in place long-term – products need to move with a client, as well as with the times. 

Protection products can also exist to help tackle wider issues impacting society today by easing the healthcare burden in the UK by influencing positive lifestyle decisions. Consumers expect businesses to make a positive contribution to the world these days, rather than simply just making a profit.

Moving away from traditional insurance

There has therefore never been a better time to fully embrace a less transactional form of insurance. One that treats a client holistically and considers their protection needs over time alongside what they want from day one. Not just at the point of claim.

This can allow protection to become embedded into everyday life. At Vitality, we’ve seen first-hand how daily interactions that incentivise positive lifestyle choices and reward healthy behaviour not only improve the lives of our members and deliver tangible value. They generate newfound levels of engagement, and this improves persistency.

Our member data shows that those who are highly engaged with the Vitality Programme are, on average, almost 60% less likely to cancel or lapse their plan1.

Not only that. If a client is regularly interacting with their plan through multiple touchpoints - that are genuinely meaningful to them - they are much more like to value the plan, over and above the core protection cover. When this involves positive lifestyle choices, they are also more likely to stay healthy.

Alongside the obvious benefits of this to a client, regular interaction also helps to foster stronger relationships, not only between them and their insurer, but also with their adviser. This leads to additional opportunities and repeat business as well as client referrals.

Relevant cover at every stage of a client’s life

As we do move away from a transactional approach to insurance, there is an opportunity for protection to move with the changing needs of a client so it remains relevant.

This is crucial, considering the always-changing economic, health and wellbeing challenges clients face.

Take advances in medical science for instance. People are today much more likely to survive illnesses that in the past that would have been fatal. More, meanwhile, are going on to develop secondary conditions.

One in five cancers are recurrences2 and 50% of people survive cancer for longer than 10 years3. All this has meant that critical illness has needed a rethink.

That’s why, when it comes to providing cover for serious illnesses, protection is far more fitting if it gives clients the ability to claim multiple times. Or continue their cover beyond its term into later life, given that there is growing public awareness around the need to fund social care costs.

To remain relevant, Income Protection, meanwhile, must flex to the needs of clients. And do more than just pay out in the event of the client falling ill and offer little value or no beyond that. Instead, it can serve to drive better outcomes for individual clients and society in general, by supporting healthy living - from illness prevention to better productivity to rehabilitation through recovery pathways at the point of claim, alongside genuine lifestyle benefits.

Furthermore, with the upcoming Consumer Duty, an emphasis on good client outcomes and delivering fair value is only going to take on growing importance from a regulatory and compliance standpoint as propositions continue to evolve in this way.

The next generation insurance

We ultimately see the development and continued enhancement of relevant and timely protection products – that live and breathe with a customer - as the next generation of insurance.

Through our approach based on driving better engagement, advisers too can help unlock more immediate, tangible value for their clients, whilst providing relevant cover based on the everyday needs of a consumer – long before they need to claim.

We believe this gives advisers a unique opportunity to support a client at every stage of their life – from enhancing their lifestyle while they are healthy to supporting them fully when they are not, into later life and beyond.

Because engaging with clients in this way is good all involved, our Shared Value approach to insurance is getting increasingly difficult to ignore.

Find out how we have further enhanced and streamlined our protection proposition as part of our ongoing journey as a next generation insurer.

Where to next?

  • CEO Adrian Gore on the High Performance Podcast

    Vitality founder and Discovery CEO Adrian Gore recently joined BT Sport presenter Jake Humphrey and organisational psychologist Professor Damian Hughes on the High Performance Podcast to share his story.

  • Protection must offer more than just peace of mind

    During the cost-of-living crisis, delivering clients immediate value – as well as financial protection for when they might need it most – is more important than ever, writes Andy Philo, Director of Strategic Partnerships for Vitality.

  • Insights Hub

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

Vitality Claims & Benefits Report 2022
National Cancer Institute, accessed 2021
Cancer Research UK, Nov 2021