DeadHappy and CLosing the Protection Gap: Seeptember Protection Forum Part 2
This is the second post in our series covering the great conversations from our September Protection Forum. In this session we spoke to Phil Zeidler from DeadHappy about closing the protection gap, how their product and processes work, and what the insurance industry can do better.
What demographics are you mainly seeing engaging with your product?
We actually have more women than men which was a surprise to us as we thought our messaging might put some women off. Most of our customers are millennials, 25-40.
Phil Zeidler:
It is really interesting. So we are, which is contrary to where we thought we might be, slightly overweight in terms of gender from females to males, which was a bit of a surprise to us, I suppose. We thought the sort of slightly pure old humour might put them off. But there it is.
And we do have the bulk of our customers that are in that millennial age of 25 to 40– I think the average age is about to mid-30s. We see a little bit depending on the campaign, we can see that does sometimes influence those sort of demographics. But that’s been reasonably consistent since we since we launched.
Paul Reed:
It was only a very brief query just in terms of the actual panel that you guys work with. Is it purely non-advice that you guys offer it as? And if so, are you whole of market or restricted panel, single time? What’s the setup, if you don’t mind?
All the technology and the platform is our own. We work with one insurer, Covea, and Gen Re is our reinsurer who we designed the question set with. Our product is a 10-year rolling renewal and you pay on your age today rather than your average age. We also run an engagement program which most life insurance companies don’t, but we contact our customers every year. Another question would be: how long is the correct amount of time for a life insurance policy to run?
Phil Zeidler:
I suppose this is probably part of a longer conversation. But no, this our own tech stack, it’s our own platform, it’s our own product, it’s our own design, everything. We have a single insurer which is Covea, who does the fronting insurer, but truthfully, they don’t do actually anything other than because we’ve got all the capability on all that. And then we have Gen Re as our reinsurer who we actually designed the question set with and the product with.
And our product is a 10 year rolling renewal. Currently, that’s the one, we are developing another product to go alongside that. With annual review pricing. So you pay based on your age today, not on your average age. And then we actually we do an engagement programme. So we think it’s slightly odd– I know this doesn’t apply to most of you as brokers as you do engage with the customers– but certainly life insurance companies, direct companies don’t engage with their customers at all. I’ve got some policies where I just get the minimum annual notice. But we actually contact our customers every year and we extend the policy each year.
So you’ve got a flexible term that means that policy can last for the whole of your life. And our view there as around the fact that actually, we’re going down a rabbit hole here, but there is a really interesting conversation about what’s the right term for a policy to be? Because I’ve had a 25 year policy, it’s run out. No one told me it was running out. It ran out. So that’s a different debate.
What do you think the insurance industry is doing well in terms of marketing, and what could they be doing better?
All the insurers seem to be marketing to the same audience of responsible people who care about having insurance. But we’re interested in looking at everyone, all the people who are a bit less responsible and aren’t very interested in insurance? The protection gap is getting bigger because a lot of people aren’t getting product or marketing that’s appealing to them.
Phil Zeidler:
From a marketing perspective, I think what they do and what often happens is people are appealing all to the same audience. There is a body of responsible people out there who absolutely are slightly risk averse, they think about these things, they’re quite organised and life insurance will be a high priority for them.
And therefore, they look at these adverts, and that appeals to them because they’re big organisations and they’re safe and it’s speaking exactly their language. What we don’t see is: so what about everyone else? What about all those people who are rather less responsible, who don’t think about this stuff particularly and aren’t interested in it and just see it as dull? And that’s I think what the challenge is. It’s all just the same.
There’s very little differentiation, and I know it’s a terrible sort of example of one which happens with my daughter, and this is true. Before I even started this, she would just laugh at life insurance adverts to say how awful they were. Because it would just start, well, in her view, and she’s a youngster. It’s a really interesting reaction. So from a marketing perspective I think that’s the problem. Insurers play safe. I get it. We’ve got nothing to lose, they have.
But they reputationally they do tend to play it very safe and therefore they are only accessing that similar audience and the evidence is just there for all to see– the protection gap is getting bigger. It’s not getting smaller. I don’t think anyone has ever disputed that.
So it’s evidently, you know, that means, and this is, I know, a controversial thing to say. But I think the evidence says we as an industry are therefore failing to meet the need and build, you know, whether it’s products or whether it’s campaigns or new ways of engaging, that’s meeting the customer needs and the customer ultimately is the one that matters.
A lot of the people who start off with DeadHappy will often end up needing an advised product as they age and their lives become more complicated. What is your philosophy on being joined up with the rest of the industry and the messaging around the aspects of the insurance process where advice might be needed?
Roy McLoughlin:
Again, I was in that call with Alan a few months ago and thanks for doing what you’ve done there because I think you’ll remember, I guess our biggest issue was the reputational damage that could be done by people using the wrong terminologies and that it could be perceived as slagging everybody off.
So the fact that you’ve reverted some of that terminology is great because ultimately it comes to my question: you might be fishing in a slightly different pond to most people on this call, but ultimately, we’re all still in the same pond here. And I guess my question to you is, your fish at the moment might be people who many of us wouldn’t naturally see as clients who start off with– but of course, one day they will be because these would be people who will progress with their lives in terms of ages or working or whatever their circumstances are.
It’s therefore really important that the message of “at some point you need some advice and not just on life insurance, but on other products” is consistent with the industry. Which I think hopefully everybody in this call agrees with.
What is DeadHappy’s philosophy there in terms of the fact that some of your fish will be will become the fish of other people in such term of being joined up and collaborative with the rest of industry and the message that advice is needed at certain parts of the protection process?
We do recognise that our current product and approach meet the needs of some people and not others but I don’t see us creating an advice arm in the near future. Our interest is in making sure people are properly protected, and sometimes that does mean signposting them to different places.
Phil Zeidler:
So as I said at the outset, we absolutely know that, our current product and approach and all the rest of it is good for some and it’s absolutely not good for others and it doesn’t meet the needs of others. I don’t think certainly in the near term, we’re about to sort of set up a big advice arm. I’m not sure I answered the question, actually, but just to be clear, yes, we are definitely not advised.
We have tools, the death-wish platform is effectively an assistance tool to help people think. But certainly there are no individuals who actually talk to customers about what their needs are. And as you say, we do think we’re just getting people onto the ladder and as their needs change, we will engage on a regular basis, and it’s in our interest to make sure they’re properly protected.
And there are many different routes for that, whether it be through signposting, because we are regularly, every year, speaking to these customers asking if their needs have changed. Finding out, and when they’re telling us we will be listening carefully to work out what are the solutions for your needs and is that signposting them to different places, whether it is some things that we develop, I don’t know.
I suppose it’s all it’s all upon on the journey. But ultimately we aren’t going to be all things to all men for sure. So, yeah, there’ll be times where we’ve just got to absolutely pass customers on, or they will find their way to people who can provide those services anyway.
Some clients that have come across to us from you aren’t aware that it’s a 10-year rolling contract or they think that they have a critical illness policy instead of near-death cover. I wonder if in the simplicity of the communication some of the information the client needs isn’t coming across.
Emma Astley:
I’m all for being different and it is fab that how you change things and how you know the marketing is really, really good. But this also concerns, I think, for me and other advisers, just around the products and if they are the right products for the client. And obviously, I can’t see the full terms and conditions in any definitions or anything because they’re not online. You can’t view them if you don’t get them until after the sale.
But what concerns me is that clients aren’t aware, and these are clients that have come across to us, they’re not aware that it’s a 10-year rolling contract. They think that they’ve got a 30 year term. Or, the critical illness, they think they’ve got critical illness and not near-death cover. And so really, it’s just for me– is it clear enough to clients, even though I love the simplicity of it is fantastic, but is it too simple where it’s not actually giving clients the information about what is covered and what isn’t? If you know what I mean.
We’re always working to use language that meets customers’ needs and is clear. We would argue that most of our papers are read by the customer, which is a huge step in the right direction. To us the most important thing is that the product is flexible—because you can give perfect advice to someone that meets their needs now, but in 25 years their lives will have changed and it won’t make sense for them anymore and if you can’t change the product then you have to cancel it.
Phil Zeidler:
And I think that’s a challenge that we face into every day. We work with obviously insurers to try and work out whether it both meets the customer’s needs and is really clear. I think we would argue that actually the language that we use, it actually gets read. So the majority of your customers will not have read most of your stuff. That is simply fact.
So the fact that it gets read is a big step in the right direction. We actually look to make it very clear. In fact, there was some feedback when we had the call from Alan and Roy around one of the things around the 10-year rolling product, which we were happy to amend to try to make it as clear as it possibly can be. But it’s a 10 year rolling product.
There’s some interesting ones, mindful that we don’t get drawn into this debate, but there is a really interesting question of how long is the right term? Why is 30 years right? Why is 20 years right? You know, the stats say that if you get a condition, if it hasn’t killed you in 10 years, you almost certainly will survive. You’ve got the five year NHS survival rate. So it’s a really fascinating debate. We are going to develop an extended product so that people have got the choice.
What’s more important, in our view, is actually that they can flex it because what we don’t see is– you can give the best advice possible, absolutely perfect advice to sell a product that meets their needs exactly at the time they buy it. But you can’t possibly be confident that that’s going to meet their needs for 25 years. In fact, you can be pretty certain it won’t.
And we think that’s a big issue, that’s probably we would argue the biggest issue. So you could be the best adviser in the world, but your advice will be completely redundant in a few years’ time because their circumstances will change. And if you don’t have the product they can flex, then what you’ve done is you’ve built them into a product where they can’t change, they’ve got to cancel it. So why get a 20-25 year product?
My issue is that the near-death experience is possibly leaving clients vulnerable.
Emma Astley:
I think it’s more against the near-death experience one that is a bit nervy to me, thinking there’s only four conditions covered and it’s very simple on what is covered, and it doesn’t really give you a full explanation line. Do you know what I mean? Where as, if a client in her breast cancer in a year’s time, they’re more likely to get paid out from a main provider than actually getting paid out from product by yourselves? So it’s that are we leaving clients vulnerable by having an a near-death simple product?
It’s definitely a challenge of where to draw the line because no product covers everything. We think it’s important that the customer at least understands what they’re covered for and that that’s very clear and simple. And while the product may be simple, if our clients didn’t buy our cover they probably wouldn’t have any cover at all.
Phil Zeidler:
And absolutely, I accept that’s one challenge. And where do you draw the line? And they’ve got lots of things, almost no product covers everything. AIG have got their ‘three simple.’ You know, that’s the route we’ve gone because we think at least customers know exactly what they’re covered for because so often insurers are focussed on product and tweaks and little amendments that that are really quite confusing to customers.
And so ultimately, if you ask the customer, do they really understand exactly what they’re covered for and what they’re not? And some of these more complex ones, they don’t know anyway. So our view is let’s keep it really clear and simple. And they’ve got a choice. Now, it doesn’t mean that it’s going to be right in all occasions, and we will undoubtedly have customers who might imagine that they’ve got broader cover than they actually have. And that is undoubtedly a truth in a simple cover like that. All we can do is make sure that we reiterate exactly what they are covered for and make sure that they’re aware.
Whether we’ll ever produce a more complex cover, I don’t know. But what I often come back to is I’m pretty sure that the majority of people who, if we didn’t offer it, they wouldn’t buy your policy, either. They wouldn’t buy. And better that they have some cover than none.
