Ned Cazalet, founder of life and pensions consultancy Cazalet Consulting, told delegates at yesterday’s Protection Review conference that the lack of growth in the protection market was the fault of providers not designing “sticky” enough products.
He said: “Life surrenders have doubled in six years because of increasing rebroking of protection policies. The industry has to start thinking about how to reduce it – it’s bonkers.
“Someone needs to man up and actually open up a proper dialogue on this. We need to get real about where our customers are and how we engage with them.
“It’s time to focus on back books and managing that. Providers need to think about how to design products to make them stickier.”
Cazalet also accused advisers of exacerbating the churn problem by rebroking the same clients onto new policies with different providers rather than seeking out new clients.
He added: “It seems the protection industry is sales and claims focused with nothing in the middle.”
He also called on providers to find a protection solution for non high net worth clients that was “a simplified version”.
He said: “What’s the point of selling a few people Bentleys and Rolls Royces when everyone else is walking around with holes in their shoes because there’s no bus service.”
A spokeswoman from the Financial Ombudsman Service said they received complaints from customers whose policies had lapsed because of a minor change of details such as a new address.
She said she thought little was being done by life offices to retain these clients.
