1. Star Ratings and Product Differentiation
Ben Heffer – Insight Analyst (life & protection)

2. Agenda Defaqto’s products and services
Star Ratings
Income protection
Short term income protection
Mortgage payment protection
Creditor insurance product update

4. Defaqto products
Compare
defaqtomatrix

5. Star Ratings

6. What are Star Ratings?
Star ratings measure comprehensiveness Star ratings do not measure suitability Features measured of benefit to end consumer Helps consumers segment the market Whole of market

7. Star rating methodology
A range of individually scored features. An overall aggregated score. Benchmarks for 5, 4, 3 and 2 stars. A number of core criteria – features that must be included in order to achieve four or five stars.

8. Star ratings
Since 2000, 80 different ratings (17 protection) Long term: Income Protection Insurance (IP) Short term: Short Term Income Protection (STIP) Mortgage Payment Protection Insurance (MPPI)

9. Star rating criteria (STIP & MPPI)
Cover options (ASU, AS, U) Benefit periods (3, 6, 12 months, 24 months?) Excess periods (30 days, back-to-day-one) Definition of disability Initial exclusion (AS 30 days, U 30 days) Back to work help Treatment of pre-existing conditions Stress/Back problems Cancellation/change notice period

10. Income protection insurance (IP)
Greater focus on: Financial underwriting Additional features and benefits, e.g. guaranteed insurability, indexation, waiver of premium Claims support services Health and wellbeing services

11. Add-ons

12. Add-ons for STIP and MPPI
Constraints on cost No need to mitigate against long term sickness Cultural differences Sales channel factors Is there a value-add model for creditor insurance?

13. Creditor insurance product update

14. Creditor insurance products 2008 – 2016

15. MPPI v STIPP products 2008 – 2016

16. STIP provider types

17. Short term income protection
51 products (53)
17 underwriters (17)
25 providers (34)
Banks/building societies
Brokers/broker networks
Web distributors
Insurers

18. STIP – products by distribution channel

19. Number of PPI complaints to FOS

20. PPI – FOS uphold rates
Source: FOS

21. Number of PPI complaints (cumulative)
Source: FOS

22. Income protection outlook
Increase in new income protection policies sold in 2015 (10.7%)
Increase in limited payment terms (22%)
Increase in 2yr benefit (92%)
Long term vs short term?
Source: SwissRe Term and Health Watch

23. Ben’s thoughts

24. Ben’s thoughts Product quality Customer loyalty
Sales stats for STIP and MPPI

25. Thank you Ben Heffer, Insight Analyst – Life & Protection
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