The state of protection
This time of year is traditionally the time when the nation goes on its holidays and chills out a fraction, but for us on the Protection Review it is a very busy time of year. This year’s events were again a fascinating insight into the challenges facing the industry and I want to look at two things that occurred during our discussions because I think they impinge on the future very significantly.
It is interesting to get very bright and opinionated people together and discuss how they see the industry developing. I often disagree, sometimes radically, with opinions proclaimed but very often the people who do express them are much more successful (and richer) than me and this is because they see things that others do not.
This year we had doubts expressed about the value of critical illness and income protection and even doubts about the value of claims disclosure. Needless to say I am a huge fan of IP, a pretty big fan of CI in some situations and I think claims disclosure is de rigeur. We have to realise that the public does not trust us to pay claims and if we can give them reassurance that we will pay whenever we can - this is very important.
I was most impressed by a number of presentations. David Heeney and Steve Casey were brave enough to question the direction of current regulation especially the huge amount of time spent on Solvency II. Solvency II is very important and we need to comply with it but does it occupy too big a share of our energies, given the number of company insolvencies in the life sector in the last 30 years?
What was so refreshing was the number of people who talked about what processes, products and strategy would mean for customers. It was great to hear an industry that has never been great with customer centricity change its focus so significantly. Ian McKenna pointed out that we cannot turn our face against the tide of technology which is washing over us at an ever increasing rate. We cannot claim that life insurance is different because we want to preserve our way of doing things however cumbersome it may be for our customers. Those days are gone. Mr McKenna spoke of Korea where people use smartphones to buy goods on the Seoul underground, which are delivered on their return home. At this point I saw one or two eyes glaze over. There are people in our industry who think it will never change (or perhaps hope is a better word than think). Frankly that is ludicrous if they consider the effect of the internet, the heightened expectations of customers and the way in which service standards are ruthlessly compared in other industries.
A few times over the years I have caused offence to people in the industry who have claimed I am knocking our product and putting people off buying cover. I bridle at these accusations until I realise that many people think change equates to criticism. I think it equates to survival. I think it equates to the desire for continuous improvement and I think it equates to the natural evolution of an industry facing up to a major shift in thinking and capability.