Income Protection Forum: The Start of the Conversation

Recent TV advertising campaigns are changing the conversation with employers and employees, finds Edmund Tirbutt

The national TV advertising campaigns begun by Aviva and Unum in the final quarter of last year are already starting to increase consumers’ awareness of income protection, said delegates at last month’s Corporate Adviser/Unum industry forum – ’Income Protection: Shaking Up A Stagnant Market’.

Dave Middleton, managing director of Portus Consulting, said: “The TV advertising has definitely raised the product’s profile but it’s only the start. I did some research amongst friends and family who said they hadn’t heard of Unum but when I mentioned the back-up plan campaign and the table cloth ad they began to remember. Some of Aviva’s ads were considered to have been very funny.”

But the controversial Aviva advert used during ITV’s Downton Abbey, which told the story of a motorcycle accident claim during consecutive ad breaks in a number of different instalments, inevitably split opinion. John Deacon, head of employee benefits at Helm Godfrey, considered it to have been in poor taste but acknowledged that the advertisers will say it achieved its goal in raising the profile of income protection. Laurence Power, consultant at Kerr Henderson, begged to differ.

Power said: “I saw some of the online stuff with people complaining about the Aviva ad but I couldn’t understand why it was considered to be in poor taste. It was hard hitting but there’s been a lot worse out there. You didn’t see the motorcyclist lying in the road covered in blood, which certainly would have been in poor taste.”

Jack McGarry, chief executive officer at Unum, thought it was good that Aviva took this approach. “As you need to get these facts out there somewhere” but explained that his own company’s advertising consultants had warned that scare tactics wouldn’t engage people and would turn them off.”

Steve Herbert, head of benefits strategy at Jelf Employee Benefits, who pointed out that scare campaigns are likely to be used more effectively by government agencies, felt that Unum’s TV ads and marketing campaign generally had created more awareness of the company’s own name but had not yet generated any greater understanding of the risk gap and, in particular, the income protection risk gap.

“I did some research amongst friends and family who said they hadn’t heard of Unum but when I mentioned the back-up plan campaign and the table cloth ad they began to remember. Some of Aviva’s ads were considered to have been very funny”

Power liked the way the Unum adverts pointed out that the product was available via the employer as he liked the idea of companies who provide group income protection being considered employers of choice who should attract the cream of recruits. But he was disappointed that other major group risk providers had not followed suit with their own advertising campaigns and, in particular, that it hadn’t been possible to conduct a single unified industry campaign.

Power said: “Wouldn’t it be great if Canada Life or Legal & General joined in? The reason it hasn’t been possible for an industry-wide initiative to work is that it was felt you couldn’t meet four or five different provider strategies in a 30 second ad but I’m old enough to remember when Vehicle and General Insurance went down. The ABI put out a cartoon telling people they should insure and that as an industry we could provide the general insurance they wanted, but it was all completely free of any branding. Some argue that this campaign actually saved the British insurance industry.”

Lee Christian, senior consultant, health and risk practice, at JLT Benefit Solutions, said: “The TV advertising does seem to have increased awareness, as group income protection is on the agenda for discussion whenever I see clients nowadays. But, although clients have come across the Unum ads, they don’t seem to understand what they’ve actually seen. So the campaign has been a door opener that allows us to explore perceptions of income protection. When you’ve established why they aren’t buying you can knock down a lot of the reasons straight away by pointing to lower-cost options and changes in product development. It can help having something independent of you out there to give a message you can back up.”

Such feedback proved broadly in line with Unum’s expectations as the company had not been expecting to be inundated with new business enquiries. Rather, the provider is taking a long-term view aimed at stimulating discussions between employers and employees. Having said that, plenty of quick wins were already in evidence.

People now know who Unum is when their representatives visit the House of Commons and House of Lords for lobbying purposes, the website referred to in the ads has received over 300,000 visitors, and 650,000 have seen the ad on YouTube. Last November, after the first month of advertising, Unum also had over 300 people calling its offices asking how to get a back-up plan and five to 10 HR personnel calling to ask how much such a plan might cost. Because the product is sold through intermediaries, no contact number is provided on the website, so enquirers were calling reception from Yellow Pages.

Marco Forato, chief marketing officer at Unum, said: “We will continue the TV ad campaign and we want intermediaries to go to employers and check that they understand that their employees are seeing the ads and that they might ask about them. They might only get three people calling now but in a year it might be 30 or 50. It is going to be slow as we are starting in a market that hasn’t changed for 30 years but we are gradually getting our messages across, and change that takes five years is better than no change.

“It’s all about engaging, because if we can get employees involved in a conversation then the chances of explaining things are much better. We run a lot of focus groups when we explain that during your working life you are three times more likely to suffer a disability that keeps you off work for six months than to die, and that there is a 20 per cent chance of this disability happening to anyone. But everyone always thinks they won’t be one of the 20 per cent until you engage them, and this takes time.”

Forato continued: “We are not trying to explain to every HR person in a 30 second advert exactly what income protection is. It would be impossible and, fortunately, we have you intermediaries to do that. The key thing we are trying to achieve is to get employees to understand the importance of the product so that when an HR person explains they will have to reduce a little bit of PMI premium to afford it the employees say they understand why the rebalancing is necessary.”

“The TV advertising does seem to have increased awareness, as group income protection is on the agenda for discussion whenever I see clients nowadays. But they don’t seem to understand what they’ve actually seen”

Christian agreed that rebalancing was key and pointed out that people often have no idea why they have the cover they currently have.

He said: “In the majority of cases it’s just down to history and they explain the cover simply by the fact that it’s what they had before. A lot of times you are getting quite high levels of life assurance, whether its lump sum or death-in-service pension, and the cost of death-in-service pensions these days means you could probably increase lump sum benefits but also have an element of income protection in there. Critical illness cover, which is pretty poorly sold in the industry can often be increased as well. But it’s a difficult time for employers and there’s only a set amount of money they’ve got, so it’s a case of rebalancing and seeing what you can do within the budget available.”

McGarry emphasised that he wanted employers to realise they don’t necessarily need full income protection. They are often making cost judgements based on the coverage they are currently providing to highly-paid executives when a base level provided by something like Unum’s Foundation cover can cost only £200 to £250 per employee per year.

“You need conversations with employers about what they really want to protect,” explained McGarry.” Having the discussion can bring up a lot of different answers to what you may be expecting from employers. They may want to do a reasonable job at a reasonable cost just providing some layer of support.”

Christian agreed, saying: “There has been the assumption that the employer wants to provide a gold level of service and gold product but in actual fact it’s just about getting to know that client and finding out what they want. A Foundation type policy may be ideal in some cases.”