Modular behaviour

“We understand that flexible by definition may mean that it is more complicated to understand if it were sold direct, but our product is not designed for that,” says Briggs from BCWA. “We have designed something to be infinitely flexible, and any intermediary performing a fact find will see that the construction of the product will easily present itself.”

NU’s HealthSolutions was built out of a concern that with so many different products available, customers and intermediaries were becoming confused and the focus of the sale was becoming misdirected.

“Instead of focusing on the product, it would be preferable to talk about customer needs. With a modular product you can be flexible, you can have a core benefit and the options will shape the plan, rather than offering set products that do different things,” says Nick Homer, senior propositions manager (consumer) at NU Healthcare.

The new products are much easier to sell, according to many brokers.

“The new flexible products are much more along the lines of choice. It makes for a really easy sale. With modular you can find out what is important to the customer, and then work within their budget. It is about asking what they want, and then the only stop is cost,” says Jackie Drake, a director at Cameron Scott Healthcare, a Maidstone-based independent broker specialising in individual and corporate healthcare, which assisted L&G in the development of its latest product.

However, while modular products have garnered a lot of interest, some intermediaries report that there have been some teething problems with the quote systems. Robin Dowling, general insurance manager at Personal Touch Financial Services (which is launching its own online quote system in November) says that modular products should be built into systems in the future.

“It is only slightly more complicated to build flexible products into quote engines than standard products,” he says. “Although generally quote systems will just give a price guideline, and it is up to the intermediary to utilise their knowledge and experience when determining the exact price and coverage.”

However, in spite of some minor concerns over any supposed drawbacks of modular PMI offerings, Rolland from L&G sums up a widespread enthusiasm in the industry for them.

“For a consumer to be able to tailor a product to suit their lifestyle is key to success in the future,” he says. “No longer are we stuck in rigid boxes of bronze, silver, gold or comprehensive and budget. We are providing far more choice and flexibility to the customer to be able to select the product that meets their lifestyle. We are building a plan at a cheaper price for the benefit of the customer.”

The only problem then is whether individuals will make the right choice. Dowling from Personal Touch does not think this will be an issue as with many of the modular products clients are under the guidance of a professional medical insurance intermediary.

“In any case individuals today are much more aware about the cover that they need, from the coverage in the media on diseases and treatments and the NHS waiting lists and cleanliness problems,” he says. “There is less chance of confusion because individuals today know what they want and need.

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