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The Life Insurance Market
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A selection of photos from our awards on March 17th are now available to view online. Either click here or visit the LifeSearch page on Facebook where you can view them.
Matt Morris, LifeSearch
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Last night (25th March) at the prestigious Money Marketing Awards, LifeSearch was once again named Best Protection Adviser, beating several high profile companies to the title.
It's wonderful that such an important independent publication like Money Marketing recognise the high quality advice that we give and how important it is to consumers.
Matt Morris, LifeSearch
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Welcome all to the 7th LifeSearch Awards. It’s good to see so many of the protection industry’s most powerful people here, but also good to see so many of those who actually do the front line job at the insurers; those who directly help us get customers covered. You all do good work in the fine cause of helping individuals and families protect themselves against the worst.I think you and we, should be very proud of what we do.
Our industry mourns one of its old-school leaders. Simon Clamp fought for Aegon and most recently led Friends Provident’s protection business with real loyalty and great energy, during its toughest days. He will be sorely missed.
And for LifeSearch, this year has been darkened by the tragic death of our marketing director, Nick Crossman. Nick arrived in 1999 to manage our press advertising campaign. He saw us through the rise of online marketing and built the market leading system that delivers some 2-3000 leads a week, every week, to our advisers. Nick was simply excellent at his job and enormous fun with it. We miss him dreadfully.
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Amongst you our insurer partners the last 12 months have seen real mprovement in service levels from you to us and our clients. Teleinterviewing has I think brought with it the understanding that technology can be profitably deployed as an enabler of good people, not just a destroyer of their jobs and you have used it to simplify and speed up much of what we do while allowing us to keep the personal touch that gets dozens of customers writing nice things about us each week.
And further congratulations are due to all providers for your ever-improving CIC claims paid stats. Urging you to publicise those was one of LifeSearch’s earliest campaigns and the oxygen of publicity has powered the paid percentage from levels around 70% to around 90%. And while LifeSearch can be proud of our foresight it’s you who have done the work and made this huge improvement. Well done and thank you! We are also delighted with the growing number of you who offer premium reductions when making exclusions. This is a real TCF sales aid and a sales aid that treats customers fairly is a perfect thing! More please.
But not all our campaigns have succeeded. While LifeSearch has had a strong year of growth, posting good profits and growing to a sales force now of 80 advisers, all of whom are better trained, coached, and managed than ever before; I personally failed to get the industry marketing itself properly to consumers. We perhaps did give protection marketing something of an adrenalin shot, for just as the whole industry decided not to spend £5m marketing protection, together, as something that consumers need, so Compare the Market have announced plans to spend the same amount marketing their life insurance as the cheapest. Not the same thing at all of course, but in this case any publicity is good publicity and despite my fears at the consumer outcomes achieved through non advised purchase, I’m pleased that someone will tell consumers that life insurance is still out there! The Meerkat’s boldness will aggravate a fine irony I’d ask you all to ponder for a moment. In 2010, seeking to regulate a financial services market without regulating its online outcomes is surely ridiculous. The vast majority of consumers who set out to learn about any particular aspect of financial services will type the words they think most relevant into their Google search bar. And if you look at keywords such as life insurance, and critical Illness you’ll find almost only non advised online sellers, and under Income Protection you’ll find only the disgraced tribe of PPI sellers, wearing a subtle disguise!
No matter their pros and cons, all of these provide a very different consumer solution from anything the FSA has ever sought to achieve. Now I don’t think the FSA can regulate Google, they are not the Chinese Government after all, but as these sites are not regulated in terms of the quality of outcomes they cause and the question I’d like you to think about, is this.
“If ever more consumers do most of their learning from sites whose consumer solutions lie outside the regulated world The FSA is regulating and protecting a rapidly shrinking proportion of all buying decisions each day. As this trend is continuing and accelerating, what is the point of having the retail firms side of the FSA at all?” To be clear, I’m really not calling for more regulation, but I am wondering where the rise of non-advice on-line leaves.a by-passed regulator?
But leaving aside the perverse and unintended consequences of regulation and the blistering competition now prevalent in our markets, LifeSearch continues to prove that specialisation, commitment and customer-focus make growth possible even in very harsh conditions. And so with brave hearts and no fear of the economic, political or regulatory future – for today at least - let’s recognise your achievements by telling you which of you the LifeSearch teams think are the best at what you do.
Ladies and Gentlemen, the LifeSearch Awards 2010!
Tom Baigrie
LifeSearch
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The list of winners at the 2010 LifeSearch Protection Awards - as voted for by LifeSearch advisers, managers and support – is:
1. Best Service Provider
AXA
Fortis
Legal & General
Winner: AXA
2. Most Improved Provider
AEGON
Aviva
Fortis
Winner: Aviva
3. Best Critical Illness Provider
AXA
Bupa
PruProtect
Winner: AXA
4. Best Income Protection Provider
LV=
Pioneer
Unum Ltd
Winner: Unum Ltd
5. Best New Initiative (sponsored by RED ARC Assured Ltd)
AXA
LV=
Legal & General
Winner: LV=
6. Best Underwriting Team (sponsored by Medicals Direct Group)
Aviva
AXA
Fortis
Winner: Fortis
7. Best Individual Impact
Andrew Wibberley - Fortis
Dawn Hennessy - AXA
Debbie Bolton - AEGON
Sarah Felgate – AXA
Naomi Greatorex - AXA
Trevor Head - Fortis
Winner: Naomi Greatorex - AXA
8. Best E-commerce Provider
Fortis
Legal & General
Royal Liver
Winner: Fortis
9. The Nick Crossman Award for Best Marketing and Communications
Aviva
Bright Grey
Legal & General
Winner: Legal & General
10. Best Protection Story
Winner: James Charles (The Times) – Don’t fall for the banks’ hard sell
11. Outstanding Protection Director
Bernie Hickman - Legal & General
Mike Warr - Royal Liver
Richard Verdin - Aviva
Winner: Bernie Hickman - Legal & General
12. Best Overall Provider (sponsored by The Exchange)
AXA
Fortis
Royal Liver
Winner: Axa
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Your columnist feels foolhardy enough using this space to regularly point out the shortcomings of the FSA, but when it comes to challenging Google in the same way, any internet marketer best tread very carefully. Lord knows what Google can do to an SEO or PPC marketing campaign if they decide you need to be punished for pointing out flaws in their methodology!
Let’s hope they are benevolent gods. For there is no doubt that seeking to regulate a financial services market without regulating the online outcomes is becoming a less viable approach with every passing day. Already the vast majority of consumers who set out to learn about any particular aspect of financial services will type the words they think most relevant into their Google search bar. And for most all that means they will get to meet whatever site Google thinks most suits those words. Now if that turns out to be sellers who provide a very different solution from anything that might constitute good advice, then the FSA’s very expensive efforts at educating consumers are being dwarfed, thwarted and thrashed by the world’s most powerful marketing tool.
Let me give you an example or two. If you type in “life insurance” not one prominent player on that search term on page 1 offers advice as their primary solution. But the FSA are clear that non advice, while acceptable, is not the process likely to yield the best results for those consumers not sure of what they want. Try “critical illness”, which arguably only the truly expert should buy without the protection of the Ombudsman, and again non-advice dominates entirely. And it has no requirement to encourage, let alone ensure suitable buying decisions. Worse, type in “income protection” and you have the fantastic irony of the disgraced PPI market being laid out in front of you, having hijacked the good name of an entirely different product for its own ends. And I’m told that “ISA” and “Pensions” and all other likely words where a normal person might start a financial services journey or investigation will lead most to non-advised non-ombudsman protected solutions.
So the web and non-advice are synonymous, and that may not matter much when you are buying a book, but in financial services the quality of the buying decision is (rightly) seen as being of such importance that protecting it has spawned the vast quango that is the FSA and the huge costs it imposes on all in financial services. And in the end only the consumer can pay that bill. But if consumers mostly all do their learning outwith that cost base and its protection what is the point of having it. It’s regulating and protecting a rapidly shrinking proportion of all buying decisions each day.
And the only reason for that is that Google decide who consumers are most likely to meet the amount they spend and the structure of their site, not in any way the quality of the consumer outcome they cause. You can see the anomaly I trust. In short, the free market is colliding head on with regulation and the free market is winning by a mile. No problem there, but where does that leave a by-passed regulator?
The logic it seems to me is that either the regulator should insist that Google gives priority to advice and the routes proven to best serve the consumer, or the regulator folds its cards and leaves the game. Because the game is online, and online solutions are not regulated as to their suitability or quality of outcome.
Tom Baigrie, LifeSearch
published in Money Marketing, Thursday 11th March 2010
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Posted by @
11:31 PM, March 24
Excellent article Tom. I'm not going to hold my breathe in waiting for an FSA response though, as I'm surely they are far too busy beating the lowly IFA with a stick than to readdress issues such as this.
Part of the problem, as I see it, is that for the main part clients see life cover as extremely simple cover and easy to arrange with little or no intervention or advice. Obviously, we know better, but until there is more media coverage or education relating to the pitfalls of taking the wrong cover little will be done to change the situation.
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Posted by @
02:13 PM, March 13
Good article Tom. I agree with Phil - it will be interesting to see what the FSA has to say.
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Posted by @
11:06 AM, March 12
A very good article by Tom Baigrie. Would it not be nice for once to read an FSA response (after all they have a statutory duty to mainitain market confidence) on the posted comments below. Come on Lesley Titcombe, have an opinion and join the debate.....
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Posted by @
12:00 PM, March 11
Many a business has had internal challenges to the may that Google 'make the rules' but few if any stick their head above the parapet to truly open up healthy debate. Nice one!
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Hot on the heels on Bright Grey’s excellent new Critical Illness claims stats come more good news, this time from Legal & General and Scottish Provident. Both companies paid out on over 90% of claims, with L&G announcing what we believe is an industry leading figure of 93.6%. This means insurance companies are now paying out on 90% of CI claims – that figure was closer to 75% when LifeSearch first began campaigning for claims stats to be published 6 years ago. That’s real improvement that’s good for the consumer!
L&G declined just 1.8% of claims for non-disclosure (paid 93.6% of CI claims in 2009)
Scottish Provident declined 1.7% (paid 91.3% of CI claims in 2009)
Matt Morris
LifeSearch
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Posted by @
03:54 PM, March 11
Re claim succes rates: Matt, that's a serious provider-side achievement, we'll sing their praises at the LS awards next week. I wonder anyone remembers that "publicise your stats" was originally an LS campaign, and many including the ABI itself as I recall, told us we wrong and dangerous!
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The video features some manly stuff from yours truly and friends at 2m50 seconds in! And many other fine moments.
The trip worked at every level. We raised some £230,000 all told, of which I got in almost £10,000 thanks to YOUR generosity. We were not fit, and we were fat, but we puffed up hills and through the desert and the sugar cane plantations that line that part of the Nile. We had such a life affirming time that we all want to do it again next year, but I have decided that tapping you all up can really only be done once every 5 years or so, so I shall go, but just try to recruit 5 middle aged cyclists to join our very amusing gang. Any takers for 2011 in Cuba? Thanks all for your support. The monies are helping children already. For the full story click on this link www.egyptcharitybikeride2010.co.uk and to sponsor me if you haven't, and my site closes this week, click http://www.justgiving.com/tom-baigrie10.
Tom Baigrie, MD
LifeSearch
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 "I have taken over waiting duties for the evening."
Lifesearch managing director Tom Baigrie offers guests food and drink at the launch party of Kevin Carr Consulting last week. (courtesy of Money Marketing)
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Insurer Bright Grey deserve a pat on the back after announcing they paid 93% claims on their critical illness policy last year. That rate is one of the best in the industry and an improvement on their last set of figures.
They also declined just 2% of claims for non-disclosure, a very small amount indeed.
The number of Critical Illness claims that are declined by the insurance industry has dropped significantly in the past 4 years and around 90% of claims are now paid across the industry as a whole.
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Like many businesses, we buy space on Google through the 'Sponsored Links' that users recognise, and aim to compete with others in the same space. However, can we all really afford to keep throwing money at this route to gain new customers? The bidding process through Google has become progressively more expensive so that only those potentially foolhardy enough to keep going, stay there, whilst the click costs spiral. We were active for a whole range of search terms, including the 'biggie' for us, "Life Insurance" yet the costs to stay well placed here for this term and others like it have become so expensive we took a decision to stop trying to compete and look for other, more cost effective routes to gain our valuable new business. I get phone calls every day from search companies offering to 'optimise' my paid search campaigns, and they GASP disbelievingly that we have stopped. But there is a growing reality developing that more cost effective routes can and will develop and Google will have to rethink their processes - but for now they are content to sit back and let the cash roll in - ultimately at the cost to the end user, the customer.
Steve Bone - Ecommerce Director, LifeSearch
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I got a call last week from one of the many small protection specialist advisers asking me if LifeSearch had also experienced the routine trick of a telephone based non-adviser. As he put it, "The non advisers say they do not give advice, so the FSA doesn't bother them, but the moment there is competition from an adviser, they say whatever they like in order to win the business. The fact that they have no training and what they say is normally rubbish is secondary. They should not say anything at all about other policies or what's better than what. That's advice."
I said that the thing one had to remember about the FSA was that unless a lot of people kicked up a serious fuss, they seldom crack down on systemic abuse until way too late. I complained about PPI perhaps 5 years before it was challenged and even that far too late intervention was only because the OFT caused the debate. I wonder how many protection advisers there are out there who have experienced this and fancy signing a letter to the FSA enforcement division?
Tom Baigrie
Managing Director
LifeSearch
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Posted by @
03:12 PM, March 19
As an experienced Protection Adviser - I find it beyond belief a Non-Advice company will protect a client without ascertaing Demand & Need - 1 experience was a single mum on £104 per week benefit wanted £750k cover and was sold a policy over 40 yrs - Is this TCF? How can she afford premium? How can she be Financially accepted for this? - PLEASE ANSWERS ON A POST CARD
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Posted by @
11:40 AM, March 10
Where do I sign? As an ex-advice based adviser I've experienced the trickery non-advice advisers use to win business. It's about time the FSA became more proactive in stopping consumers being misled by those who give advice while saying they don't. It should mystery shop non-advising sellers to ensure all TCF. Is it any wonder consumers are confused about the protection industry? For instance some don't realise that when they buy "mortgage protection" they are normally just buying life insurance! Every individual deserves to be offered advice when it comes to protecting themselves and their family. If brokers do not and can not provide this, then not only should they tell the client this, but they should not tell clients what's a good idea, or what Terminal Illness benefit is and why it's a good idea, or purport to be different because they offer it, or pretend it's the same as Critical Illness cover, or even which product or insurer is best - all of this advice and all of it they do routinely. The FSA needs to TCF and ensure that non-advice means in reality what it means in the rulebook. For now it means anything the seller wants it to.
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Posted by @
12:04 PM, March 05
It's a problem that if going to continue unless the FSA show they mean business and stamp it out. Non-advisers get away with too many dodgy practices.
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Protection Oversight research undertaken on behalf of Friends Provident has revealed that 24 million people in the UK have no insurance in place to cover loss of income through illness or death of a breadwinner.
Even those that have considered taking some action would be underinsured by an average of £14,500 per year.
A third of people think they could live on less than 35% of their take home pay if they were unable to work through illness or injury. Based on an average weekly income of £489, that means they would have a maximum income of £171 per week, £300 less than the current average weekly household expenditure of £471, and not enough to survive on especially if there is only one breadwinner in the household.
Of those who have policies in place, over half (53%) have no idea how much they would receive if they were to make a claim. This suggests the policies they have may no longer be adequate if their circumstances have changed, for example, their salary has increased, they have married or had children since taking out the policy.
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Now the economy has struggled meekly out of recession the world of Protection advice is presented with challenges - both good and bad. Aviva’s recent research which highlights the increase in people off work long term through stress brings home the need for Income Protection more than ever while anecdotal evidence suggests consumers are more Protection conscious than ever.
Running against this is the economic impact of growing consumer indigence, which must lead to higher lapse rates and more applications not being taken up. To take advantage of the positive opportunities we need to minimise the bad. One area where the industry is making great strides forward in the latter is offering premium reductions when health exclusions are added to Critical Illness and Income Protection policies.
It is not uncommon for consumers to have one or more illnesses excluded from their Protection policy. In fact it happens in around 10-12% of Critical Illness and Income Protection applications. A condition that has been excluded cannot be claimed on, which in effect reduces the comprehensiveness of the policy, so it makes sense that the premium should, as a general rule, also be reduced.
Bupa were the first insurer to offer premium reductions for exclusions and were followed by Fortis, who extended it to Income Protection products too, when they joined the market in July 2008.
Since LifeSearch began campaigning for all insurers to follow suit last February, LV=, Legal & General, Zurich, Axa and most recently Aviva have begun their own offering. Aviva also offer premium reductions for spinal and mental health problems on their Income Protection policy.
Sadly not every insurer will do this and clients with exclusions added to their policy can find themselves paying the same premiums as someone without any exclusions.
Consumers should be aware that if they take out a policy and a significant exclusion, such as for Cancer, is imposed there are insurers who will cut their premium, so there’s no need to pay over the odds for a policy that can't be comprehensive.
Life offices offering these discounts will undoubtedly have an advantage over those that don’t in the eyes of good protection advisers. Overall quality of the product is the main consideration but it stands to reason that when there is little to differentiate between policies and one life office has the important differential of premium reductions for exclusions, that that provider will win the business, because IFAs should surely deal with offices that treat customers most fairly.
It is not only TCF, but good for sales as it reduces the number of policies 'not taken up.' All insurers taking part in this important initiative are to be applauded.
As the on-line comparison sites seek to make price the only differentiator, this kind of qualitative differentiation is what advisers must make key to their choice of insurer if we are to boost the market and get sales moving again. We have an opportunity, it’s up to the decision-makers of our world to grasp it.
Matt Morris, LifeSearch
This article was published in the February edition of Money Marketing.
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