Royal London’s head of protection Debbie Kennedy has said robo-advice is an area the UK mutual life and pensions company is looking at since it has the potential to open up protection to the mass market.

Kennedy said: "As protection business is already sold through non-advised and tele-sales channels there is knowledge and experience available that the industry can learn from. There are two ways this could potentially go – robo-advice could become a channel in its own right or could even open up a new route into existing channels.

"Either way if more people get access to advice and see the valuable benefits protection products provide that’s got to be a good thing."

Kennedy’s comments follow recent research by Life Insurance International (LII), which revealed robo-advisers – online wealth management services that provide automated algorithm-based advice without the use of human financial planners – could offer life insurance products within the next 5 to 10 years.

Scott Kallenbach, research director at US-headquartered insurance association, LIMRA, recently told LII that sales professionals with a focus on life insurance can leverage robo-advice platforms to strengthen their investment management capabilities.

Kallenbach said: "They may not have the time, or the expertise, to offer investment management. A robo platform can help fill that need."

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Over the next 5-10 years may see robo-advisers taking a more holistic view of client needs, said Kallenbach.
He commented: "They’ll be able to offer more sophisticated investment options . . .and I would not be surprised if they also have life insurance and related products

"I can see carriers creating products specific for this platform – as a way to gain access to another distribution channel."
Ian McKenna, director of the Finance & Technology Research Centre, has told LII that any protection insurance organisation that is not looking at automated advice and systems runs the risk of losing "serious market share".

Speaking to LII in January 2016, McKenna said: "I am certainly seeing things moving in the direction of [robo-advice and automated systems].

He added that although it used to take 5 years to develop a technology project, now the incubation period last approximately 18 months because such is the speed of technological innovation.

Asked what advantages of robo-advisers could offer life insurance professionals, McKenna said they would help organisations interested in behavioural science and better understanding how to market insurance.

"There is also the opportunity to engage in longer sales cycles. If people were given information and more opportunity to review and consider it, this could grow the protection insurance market, rather than cannibalise it. We will see different distribution approaches and they will sit side-by-side," said McKenna.

Royal London is the largest mutual life, pensions and investment company in the UK, with group funds under management of £84.5bn. These figures are quoted as at 31 December 2015.