World CI conference update: Irish experience points to opportunity with elite clients

(April 8, 2005) Clients don’t know much about it and most don’t qualify, but insurance companies say the market for critical illness (CI) insurance in Canada is huge and untapped.

The market is relatively young here. CI is not fully understood by many who might sell it and the product in general is barely known to most consumers. On top of this, most who have the money to afford the policies are disqualified for family history or pre-existing conditions.

Despite these drawbacks, Michael McLoughlin, senior financial advisor at Canada Life Assurance (Ireland), says the experience in his country has shown that it makes sense for advisors to be in CI. When Canada first introduced CI in 1997, the Irish had already been selling it for eight years.

At a presentation to delegates gathered at the World Critical Illness Insurance Conference in Toronto, McLoughlin shared his company’s experience in selling CI, discussed marketing techniques and talked about future areas of growth.

Admittedly, he says CI products will be the purview of higher net worth advisors in the future. Right now, professional single females make up the largest group purchasing CI policies in Ireland. Within 10 years, he says lawyers, doctors and engineers, those who can afford the product, will be the primary purchasers. “It’s going to be a very elite market,” predicts McLoughlin. “It’ll be the top end of your clients who will be able to do this in five to 10 years time.” Of those, only the relatively young and healthy will qualify. McLoughlin himself does not qualify for a CI policy.

Diana Deverall-Ross, vice-president, individual health insurance at Sun Life, says the real challenge is asking the right questions. She says advisors who only sell the occasional policy do not have the knowledge or experience needed to intuitively understand who qualifies. Occasional CI advisors also tend to shy away from the underwriting process.

To help, Sun Life spent the better part of two years developing a gateway web site to cover all parts of the sales process, including advice on markets to target and tools like a set of prospecting questions to ask before going too far in the sales process. “It’s so you can get a good idea if they qualify for coverage or not,” says Deverall-Ross. “It’s a very different product.”

McLoughlin says one of the most effective marketing tools he has is a quarterly claims profile that lists a sampling of clients paid out, their occupations, diseases, the number of years they paid into the policy, the amount they received and the amount of time it took the company to pay out the claim.

While that might help clients sign up, Deverall-Ross points out that CI needs to be sold to advisors first. She says advisors need to be more proactive about sales and actually tell clients about the product rather than assume they know what their clients need. “The company that wins is the one that gets advisors onside,” she says.

Filed by Kate McCaffery, Advisor.ca, kate.mccaffery@advisor.rogers.com