Why are we failing to provide products that meet some of society's biggest needs?
Sometimes statistics grab you by the throat and really impact on you. I was recently watching NBC’s morning news programme in the US and, just like in the UK, there was much angst about their ageing population.
Then they produced a statistic that said immediately post World War II there were 42 people contributing to the social security benefits of each retired person. Now that figure is two; two people funding the benefits of each retired person. We know our stresses are acute in the UK as well but I have never seen statistics quite as stark as that.
Now we have Jeremy Hunt, the new Health Secretary, echoing the words of the great Peter Drucker and claiming that the ageing population is "the greatest problem that we face". Similar sentiments expressed by the Prime Minister recently indicate that we may see the Dilnot proposals or something like them ratified by Government and that this Government might be thinking about the very large and important step of an integrated health and social care system.
The problem with issues like the ageing population is that familiarity with the problem can breed either contempt or a sort of bewildered indifference because the challenge is perceived as too big to deal with. That sort of thinking ultimately creates disaster but to really deal with the problem we as an industry need to think through a whole set of new issues in terms of products, underwriting and policy conditions.
In a society where people, alive today, may live in good health and be active enough to work until age 80 and then enjoy another thirty years in retirement, as some experts are suggesting may happen, the rules fundamentally change. Pension provision becomes a nightmare - leaving aside current investment woes - and in protection we need choices and options that give the flexibility our customers will need.
We need to revisit our thinking on what constitutes a first class life in underwriting terms and we need policy conditions that allow career changes to a completely different occupation at what used to be considered an advanced stage in life. And all this just as we are getting to grips with the concept of simple products.
Can our industry rise to the challenge? It will be enormously difficult if issues like social care become a political football kicked around in different directions by successive Governments. It is possible to devise a plan that morphs from an income protection plan into a long-term care vehicle and with the right industry will this could be relatively seamless. The only problem is that nobody sold long-term care in a pre-funded form, in any volume, when the market was set up and there is little appetite for income protection as industry sales figures indicate.
It's strange that we plead for relevance as an industry and then fail to provide products that meet some of the biggest needs society has. That has just got to change.