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The Life Insurance Market
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13 barristers mostly from coutries with very small insurance sectors seem likely to overturn 100 years of proper global business on March 1st because they wish to make a philosophical point. It's not good business and it's not good law and it's certainly not democratic. I hear even Ken Clarke is fretting over the new European nonsense. Speak out against it Ken!
Tom Baigrie, LifeSearch MD
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Aviva has got 2011 off to a good start for the protection industry. Consumers need to understand why what we do is important to them and their families and Aviva has taken a brave step in investing time and money to do just that. We have seen what successful television advertising can do for protection - look at plans for the over-50s. It has to be simple, clever and regular for the message to get through.
Aviva pitched its advert at the right level - subtle but with a clear message about what can happen in the event of a parent’s death. Looking at comments posted on YouTube, it is clear that some found the ad dark and one even believed it would lose Aviva customers but other comments showed it was thought-provoking and would achieve the desired result. Let’s hope so.
Countless Government campaigns on drink-driving and road safety have used emotive tactics to increase awareness and it is about time we tried the direct approach.
One of my colleagues noted that the ad is a good prom-otion of family income benefit, which is ironic for Aviva as it currently does not offer it (which I hope it will rectify). I genuinely want Aviva to see its protection sales increase as a result of its efforts but maybe we will also see an increase in Fib sales, as it is tailor-made to provide for all the things Aviva focuses on in its ad.
I hope this is just the beginning of some effective publicity of protection products. Unum has already committed to a campaign of its own, focusing on income protection, and we need more providers to follow suit.
I have some concerns about the impact of consolidation but perhaps stronger balance books may result in some investment in marketing rather than reducing premiums further. Cutting premiums has had little effect in getting more consumers to buy protection, so a different approach needs to be taken.
Given Scottish Provident’s research showing 48 per cent of advisers questioned feel life insurance is more important than income protection or critical illness, it is not only the awareness of consumers we need to worry about. Even without big marketing pushes educating consumers, it shows providers can still have an impact educating advisers.
Aviva and Unum are not the only ones campaigning to increase consumer awareness; Martin Lewis and Mumsnet have started a joint petition for financial education in schools. This is not a new idea - Lifesearch did the same in 2009 - but it is welcome. I hope the Government finally does something about it and that the curriculum covers insurance products.
Well done Aviva. Let’s hope its courage in trying something new has a positive impact on us all - insurers, intermediaries and, most important, consumers.
Emma Prescott is head of provider relations at LifeSearch
This article was published in a recent edition of Money Marketing.
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Here are some of the key numbers for LifeSearch from last year:
- 45,000 - the number of lives LifeSearch protected
- £4billion - the amount of financial protection we arranged
- 10% - increase in the number of under 35s taking out protection with us compared to 2009
- 20% - more women than men bought CI cover from us, bucking the overall gender trend in protection sales
- 166 - claims submitted that our dedicated claims desk helped or are in the process of helping, including overturning 2 declined claims
- 34 - rate changes by insurers that we noted last year
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There is nothing like a trip to Cuba to make one reflect on politics and mankind’s failed attempts to improve its lot. Dictatorships are dying daily as the internet empowers the young as never before. Mubarak of Egypt is gone, the Tunisian bloke too, Cuba is westernising daily and I bet a global review would show that the number of stable democracies is expanding every year. Of course the most stable ones are almost all in an economic mess just now, and that’s what tends to empower the dictators and their soldiers, but hopefully total chaos will be avoided, and so the risk left is that old useless dictators are replaced by more hostile and active ones as a result of the new practice of holding one election and once that’s won rigging all future ones. That’s the way in Iran and Russia and many other places and is Dictatorship by another name, but perhaps not quite so blockheaded normally.
Cuba, the 52 year old mother of all surviving Dictatorship, is a fascinating anachronism. It takes a day or two to realise that what’s missing most of all is that nowhere can you see any form of advertising, apart from the odd revolutionary slogan on a wall. No Coke, no Ford, no Beyer, Peugeot, Gillette or Sony either. It’s not just the Americans who are forbidden promotion, it is everyone bar the Revolution. It’s a phenomenal uniqueness – is there another place in the world similar? Let’s hope that as they liberalise they keep that unique rule, it could be the making of them, as could the delightfully straight fixed and universal exchange rate.
Most dictatorships breed endemic corruption, but it appears in Cuba that the rules are kept. Perhaps there are heavy sentences for those caught. So while as normal, a dictatorship means a feared police, in Cuba these seem to be relatively honest and very low profile (as were the army surprisingly). That makes crime, or at least serious crime, rare and while I bought a cigar for $1 that turned out to be made of banana leaves, there was no serious tourist con in evidence and I never felt threatened, even exiting bars onto empty streets, holding up zombie like Barbadian’s and Mancunian’s late at night!
So the place seems mostly slightly crooked, but not really criminally so, and while poverty is clearly the norm – communism really does not work as it should to change that sadly – the gap between the richest and the poorest is not really visible. I suspect it’s there, the middle class few I met seemed very 1st world indeed – but it’s kept well hidden by its beneficiaries, which is where free society always goes wrong. There is no bling in Cuba and the celebrities walk the streets and catch buses like anyone else. Their houses are just painted and they have TV’s, and even the odd car, unlike the proletariat.
And in theory they all work for the same employer – the government – I think at the same paygrade too, though in practice the majority of each individual’s economy is the black market supply of something or other home made. Technically that makes it a low tax, entrepreneurial economy, as grift and back-door trading are clearly tolerated, which will explain the clear signs of regeneration in even the poorer or more rural quarters.
That regeneration is most obvious though in the areas focused on tourism, there is a huge effort at renovation, but, as in Tuscany since the Renaissance, an effect of prolonged poverty is to preserve the architecture of the belle époque that preceded it. So the villas of Miramar, or the alleys of central Havana (not to be confused with the beautiful and restored colonial classics of Old Havana) are as they were in 1959; preserved by dictatorship against the nastiness of 60’s and 70’s modernism and the glass stumps of the 80’s version. In this respect Cuba is a model of conservation and conservatism. One would not want to be the peasant ploughing his field with a bullock, and one can’t explain why his neighbour has a tractor doing the same job, when all are equal; and one doesn’t want to drive the ancient and and-home-made, but beautiful, agricultural vehicles we found while we cycled along; but all are picturesque and their owners seem fit and well and inclined to smile. And likewise the 1950’s winged American highway cruisers – now more for tourists than being the only cars in town as they were 10years ago – are a beautiful by-product of the US sanctions and the consequent official certainty that 1959 was as modern as a society need ever be; even if their engines sound like those of Massey-Ferguson and the clouds of smoke they produce choke a cyclist as no cigar ever did.
So Cuba works OK after a fashion. Castro and his family have clearly avoided the worst temptations of the dictatorial tribe, and while the 1989 end of his Russian supply line clearly plunged his people into real misery for a decade or more, he and his junta have now allowed the West’s and East’s wealth to creep in and for tourism to develop as the huge wealth generator it can and surely well be if they keep the island as impossibly unspoiled as it now is. From the very respectable airport, to the plush tourist bus to the 5* Parque Central Hotel, upmarket tourism is sharply on the rise. Cheaper stuff is available too, and the gap is amusing. The country hotel near Matanzas was as a failing Butlin’s circa1975 might be, with good design intentions everywhere and none of them delivered amongst the mould and cracks. The difference is though, that the open fire pig spit roast was quite spectacular and the beer cost the same as it might have in Butlin’s in 1975.
The country side, towns, coast are all wonderfully unique as are the people and indeed the government. There really is music everywhere and dancing on the street, cigars are bliss and nearly free, the girls beautiful, the beer cold, the language musical and I even fell in love with rum. Imagine that.
Viva Cuba; Cuba Libre.
Tom Baigrie
PS Do chip in for Childline and Nordorff Robins on my Just Giving page! www.justgiving.co.uk/Tom-Baigrie0
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Gavin Lumsden in Citywire hits the nail on the head at http://bit.ly/gYXi6H – though how he missed PPI I’m not sure, it must have cost UK consumers way more than the rest put together. The trouble with regulation is always (not just in UKFS) that in trying to stop abuse it always stops far more best practice, or at least make it so expensive as to be useless to the ordinary consumer. The regulator lets goals in like crazy, but scores only occasional blows and them most always too late in the day.
BUT, if they get really good at product regulation, do you think there will be many new products coming onto the market? Will the mortgage and protection and investment markets become hotbeds of creativity - which they need to be to turn around our savings-free economy? I don’t think so, I think all product developers will be subject to so much red tape they will just walk away and build it in Singapore.
And talking of walking away, does anyone else think the Barclays PR around advice being too expensive is anything more than a punch in return for their (trivial) fine? I bet they stay selling Insurance Bonds until the bitter end. Seems to me the problem is that the FSA can’t get to the execs responsible because the bank legal machines will not let that happen. For banks and properly corporate investment crooks the rewards of beating the FSA for a few years are way greater than the risks of being caught in good time. Each case is different, but until bank executives get the Peter Sprung treatment they will continue to put profit before the customer. They have to!
And talking of Peter – I’m no expert, but I always reckoned he was a good bloke trying hard to preserve advisory jobs in a screwed up business he inherited. He might well have messed up, but it’s typical that such an effort gets the full treatment, while so many others far, far worse, remain safe behind their lawyers. They are safe because their businesses are better run than the FSA, more powerful lobbyists and previous or eventual employers of all FSA staff anyway!
The truth is regulation almost never works, unless it is minimalist and focussed on real abuse, rather than market perfection. We need a police-force FSA not a civil service one. We might even be able to afford that version. What chance a Tory government cutting back the biggest red-tape generator of them all?
Tom Baigrie
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