Making Direct Protection Insurance Sales Work David Buckingham July 2016

Current Situation IFA Mass Market State Health Warning: Very broad brush, simple definitions

Potential Now

To pay off my mortgage – 58% Target Market Families who don’t or won’t use traditional intermediated channels ‘Whose responsibility is it to provide financially if I die or become seriously ill’? Myself or my family – 75% Very Important – 60% ‘How important is Life Insurance’? Yes – 45% Car Breakdown Cover – 56% Pet Insurance – 47% ‘Do you have Life Insurance’? ‘Why do you have Life Insurance’? To pay off my mortgage – 58%

Excuses, excuses, excuses! Why they do and why they don’t ‘Peace of mind’ – 73% Not tangible – No car insurance, can’t drive Less than 1% chance of using, but massive impact Difficult sale! Excuses, excuses, excuses! ‘Cant afford it/poor value for money’ – 45% 50% don’t actually know the cost Complicated, don’t know how or where

But can we really do it? The basics are in place: Target Market  Opportunity  We’ve done it before – Over 50 Plans: Simple Proposition Affordable Premiums Selling to a defined funeral need

How for Term Insurance?

Take an IFA Proposition and offer direct - No Simple Take an IFA Proposition and offer direct - No Proposition – Easy to understand No bells and whistles – Complexity and choice = confusion Simple Critical Illness – 3 illnesses, fixed level of benefit Journey – Simple Simplified Underwriting with an instant decision Multi-device responsive website, with telephony back up Surprise and delight – Added extras Winston’s Wish Free Gift

Big and Brave Be Brave Nobody will get it right first time – test and learn strategy needed: Multi-Channel marketing Interactive tools Be positive – Marketing messages should normalise protection Be Big Marketing costs versus benefits can be a challenge – SunLife £40m

Will it work YES! Why? Always be customers who want to do it themselves Some customers need a nudge, they won’t go looking We simply can’t afford to get it wrong Compliments what's already in place through intermediaries