Is the Irish Insurance Industry Innovative ?

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diddles

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Is the Irish Insurance Industry Innovative ?
Many threads within topics appear to point to a lack of innovation on behalf of Irish providers/maufacturers of product..this is a start to a debate that perhaps may enlighten many as to the innovation or lack of innovation.
So lets have your contributions.....
 
Innovative ?? !

Yes why not ? I've long wondered at the way in which investments are wrapped within life insurance products creating a smokescreen through which the irish consumer is bamboozled into thinking the life insurer and its fund management team are capable of driving the business from a low cost base...
 
Is Irish Insurance Industry inovative

YES YES YES YES When it comes to picking our pockets it the most inovative in the world.
 
Cartel

Anybody who has examined the Life Endurance industry, will quickly find evidence of cartel type behaviour. When a bunch of competitors sit around a table, as they do regularly, on various commitees, market 'understandings' will arise, with agreements not to rock the boat. Innovation cannot flourish in such an environment. End of story.
 
Re: Cartel

<!--EZCODE QUOTE START--><blockquote>Quote:<hr> Is the Irish Insurance Industry Innovative ?
Many threads within topics appear to point to a lack of innovation on behalf of Irish providers/maufacturers (sic) of product..this is a start to a debate that perhaps may enlighten many as to the innovation or lack of innovation.
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I'm sorry but I don't understand the question/point.
What do you mean by innovation? Why should they be innovative? What aspect do you think requires change?

Perhaps I have a simplistic view, but I just want straightforward insurance cover that covers me for what it claims to cover. To me, "innovation" suggests selling something I don't need (some savings component) along with insurance and charging extra.
 
This debate seems to have died, but as a new user maybe I can kick start it again?

Firstly a vested interest - I work in the life industry, and have been involved in product development (but am hopefully objective with it . . .!)

Like many issues, I see some black and some white, with the truth being somewhat grey. A few arguments for both sides of the coin (concentrated on Life rather than General/P&C) are set out below.

Some examples of how the industry is innovative :

- Critical Illness cover: Although invented in Sth Africa, Irish insurers have really "picked up the ball and run with it", and have contributed many features now considered commonplace. Examples would be Hospital Cash Cover, Overseas Surgery Cover, "Double cover", Guaranteed rates etc. As a result the product (and market) is more developed than, for example, the UK.

- Investments: Consensus investment funds (led by irish Life but followed by all the major players), "nap" funds (e.g. New Ireland's Smart Stocks, Focus 15 etc) etc have all appeared as new ideas in the last few years and served customers reasonably well. Also, some of the "tracker" structures introduced here have been pretty well advanced compared to the "vanilla" products common in other markets . . .

- Unit linked: The vast majority of our products are now "unit linked" in some way . . big deal? Try telling that to continental Europe - unit linked is really only getting off the ground there, and we've had it for well over 20 years.

- Pensions: some of the charging structures currently available - particularly where commission is being funded by the insurer - could be regarded as having "pushed the boat out" further than in other countries (I have direct knowledge of Germany and the UK). You could argue this is a reaction to the greediness of brokers rather than true innovation (and you might have a point . . .) but it certainly represents Irish insurers taking risks with their product designs.

- "Niche" products: while I wouldn't say they were always a good thing (and in any case the recent tax change makes them redundant) some of the ideas around property/stockbroker "gross rollup" products demonstrated innovative thinking . . .

Ways in which it's not innovative:

- Administration: still very "paper heavy" and based on old technology. The life industry is unique in that it requires systems to support not just it's current product range but that sold over the past 40+ years too . . . and in a small market like Ireland the capex/disruption involved in migrating to new systems can be prohibitive. Impacts on product design too, mainly on speed to market of new ideas.

- Health: notwithstanding the strength of the Critical Illness market, health cover is still pretty dispersed - you have PMI (VHI/Bupa); PHI (Income protenction cover), CI; TPD (lump sum on disability).

- The last 3 years: I think there's been a real slowdown in true innovation over the last 3 years, primarily driven by the resources being devoted to relaunch whole product ranges for Gross Roll Up, implement disclosure etc. Then there have been mergers (NU+Hib+CGU, IL+IP, NI+Lifetime etc) and "imposed" products like SSIAs and PRSAs (by imposed I don't mean they're necessarily a bad thing, but the "shape" of them has largely been externally determined).

The above is not exhaustive and I'd happilly accept other views on some of the issues . . . if I was to sum up in one sentence I think there has been plenty of innovation in the past, but over the past few years innovative thinking has been diverted to other issues at the cost of genuinely new product ideas.
 
Innovative

Innovative?? Why yes...just try to collect from a critical care policy. I dare ya. That's assuming you've actually waded through the duplicitous verbiage in micro-print that you must sign to activate your "policy."
 
Re: Innovative

I presume that by "duplicitous verbiage in micro-print that you must sign to activate your policy", you are referring to the following:

- Disclosure declaration/information: imposed by law (not insurers themselves), and in any case aimed at ensuring that advisers give consumers all the relevant information they are entitled to

- Data protection declaration: again imposed by law to protect consumer's interests

- Consent to seek medical information: lets the consumer know what information the insurer can (and cannot) request from their doctor and how it will be treated

- Insurable interest/disclosure of material information declarations - there to avoid fraudulent claims that drive up the cost of cover for everyone else.

So in fact:
(a) Most of the "small print" is imposed by law, not dreamed up by life assurers trying to catch customers out
(b) It's actually there to serve customers interests, not deceive them

There's a Tom Waits song which goes "the large print giveth, the small print taketh away" and it's easy to simply assume that this is always the case - clearly not so in the cases above. I recently got a plumber in to do a small piece of work and "signed" the deal over a phone call - no small print at all. A month later and my tap still drips, the plumber can't be contacted . . . there's times that having some small print on paper would be of great value!

Squiller

PS - I agree that the wording of Disclosure Information is not great, but it comes directly from regulations. Despite company/industry requests to be able to construct this information in a much more user friendly format, DETE insisted on it being exactly as they spec'd . . . if I and others could have done it differently (and I actively represented an insurer in this process) the language would be a lot better and the notice would be much more to the point - 2 pages max, with clear headings and simple messages.
 
Re: Innovative

Squiller,

Welcome to Askaboutmoney.

It's a shame you didn't succeed in your quest for two-page disclosure information, as my experience is that the large reams of print accompanying a quote, (which as you point out, is largely there for the protection of the consumer) is being often ignored because there is simply too much of it. As an intermediary, you can send all the required information, you can encourage clients to read over it, but you just know that many will not wade through 15 or more pages of relevant information before taking out a relatively simple product.

A "bullet-point summary" would be nice.

Regards,

Liam D Ferguson
www.ferga.com
 
Innovative? Sure!

Squiller, an example I had in mind is the practice of denying coverage to a heart attack victim if it can be demonstrated that a certain PORTION of the heart muscle was not affected!! I read this in the Irish Times awhile back and wish I saved the article. It also mentioned that in the UK policies are actually being written in such a manner so as to exclude a whole realm of illnesses since they are deemed by insurers as too common.
 
Re: Innovative? Sure!

In fairness, Arsenal, I think the issue you are referring to is how products are sold. If a specified serious illness policy is sold without any explanation of what is and is not covered, that's clearly not doing any favours to the customer. However, if a customer is offered the definitions of what is and is not covered, and chooses to ignore it because they can't be bothered to read through it, I have less sympathy.
 
Re: Innovative? Sure!

Arsenal, the complicated nature of critical illness policy wordings is certainly an issue. It is possible to have very broad brush definitions - basically just a label like "Heart Attack", with no detail - but this obviously leaves a company open to more claims (including ones where the claimant may not have had a particularly serious illness) than a more specific definition would.

Ultimately the aim should be to have a product that pays out when something genuinely life-threatening is concerned, but is also reasonably affordable (in a very competitive market!) - and that would, I think, be the aim of most providers. I'd be open to opinion on whether current definitions do that, but a fair bit of expert medical advice has been used in arriving at them. There is also a lot of fear that some medical procedures - e.g. bypasses - are becoming much more "on demand" and this means having to tighten up definitions to make sure that opportunistic claims don't drive costs of cover upwards.

You mentioned the UK market, and I think the trend you mentioned is towards "cut down" products with a smaller list of illnesses. There's an example of this in the Irish market with the Serious Illness cover offered by An Post's One Direct (New Ireland underwriting it). The idea here has been to get a basic list of illnesses covering the really genuinely serious conditions - Heart Attack, Cancer etc - but excluding some more peripheral ones which may be unpleasant but ultimately are either very rare or not usually life threatening. That way cover is (a) cheaper (b) easier/simpler to understand (less longwinded definitions to read!) and (c) easier to accept people for. On this basis I'd see such a policy as innovation - trying to do something different in the market in order to meet people's needs. Sure, there are more comprehensive (and more expensive) covers out there but this increases choice.

Liam, your point about the importance of correct selling is extremely pertinent - I believe that companies have in some ways tailored products because of how they perceive brokers/agents sell them rather than necessarily customer's interests. An example would be the trend towards more and more illnesses on Irish policies - I've often heard feedback from brokers that they regard the "length of the list" as the key differentiation between companies (rather than an overall decision encompassing price, underwriting, service etc). As a broker what's your view on (a) a long, detailed list covering everything condition conceivable; or (b) a short, simple list covering all the major life threatening conditions but a bit cheaper (unfortunately not much but say 10%)?
 
Re: Innovative? Sure!

Squiller,

Longer list or cheaper premium? Hard one to call - really one for the client to decide. Personally I see many of the obscure illnesses covered as nothing more than an attempt to validate marketing claims that "WE COVER LOADS AND LOADS OF ILLNESSES - MORE THAT OUR COMPETITORS!!!" at negligible risk to the company, because no-one is going to claim.

However, I've always been a little bit wary that if, as a broker, I sell a specified serious illness policy to a client and recommend a cheaper (but less comprehensive) product, and the client contracts an illness which would have been covered under a more comprehensive product, am I liable? (My own answer to this is No, if I have explained to the client that the more comprehensive product is available at extra cost and they have chosen the cheaper alternative).

On the subject of innovation, I commend Hibernian Life & Pensions for their "illnesses" pledge that they will cover you for any main serious illness condition not listed in your Hibernian policy which is covered on a similar type of policy offered at the same time by any one of Irish Life, Canada Life, Eagle Star, New Ireland, Standard Life, Scottish Provident, Friends First, Ark Life, Lifetime & Caledonian. Okay - there's a red herring in there as Caledonian don't offer serious illness, but otherwise it's a good deal.

Regards

Liam D Ferguson
www.ferga.com
 
Innovative?

Squiller, thanks for your very reasonable and well-writen reply.
 
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