I spend a lot of my time in brainstorms and extremely hard work it is. Trying to be more creative than anyone has been before is far from easy, especially given the constraints the industry lives under such as regulation, compliance and cost pressures. I have given up expecting to wake up one morning and reinvent the industry but there are some situations developing that may well signal a breakthrough opportunity for protection.
Many of you reading this may already be involved in auto-enrolment, either as employers, employees or consultants. Reading a government booklet on it recently I was extremely impressed with the clarity of the reasons given for the adoption of the National Employment Savings Trust and the methodology used to put the operation together. Being a protection obsessive I always tend to view new developments along the lines of what impact they might have if transported to protection.
Digressing for a second, I do worry that protection gets ignored when we look at new ideas for mass distribution of financial products. The reasons for this could be debated repeatedly but I feel it is reasonable to refer to protection as a second-class citizen of the insurance space. A lot more government attention is focused on products such as pensions or investment and yet one would think that protection would be a fundamental building block of a soundly-based society.
I wonder if the rise and subsequent demise of industrial assurance had something to do with it. Perhaps the rather homely image of the salesman calling door to door gave rise to the rather downmarket image of protection but any student of post-war British society would recognise that self-provision through insurance (even for very low amounts) was inextricably woven into the fabric of our society and was a very stabilising influence on community life. That has evaporated now and I think we are poorer for it. Protection insurance is not a pillar of our society any more and I am not sure if anyone in government feels it should be.
I do not think I can be the first person to look at the way in which auto-enrolment might work in protection, but before we look at that issue perhaps the first question we should ask is whether it is feasible to embark upon a campaign to widen the process to embrace protection. I do tend to worry when an initiative depends on the need and ability to convince the government to work with us. It is not that I do not think our case is worthy, it is simply that government departments have to develop a rigorous process for testing and rationalising suggestions from industries to adopt practices or products that may prove a sales bonanza for that industry, but cost the government money. Put bluntly there has to be something significant in it for government.
The key is a cost-benefit analysis that is thoroughly researched and realistically developed. And that is where, as someone who has had quite a lot of experience in trying to get the industry to work together for the general good, I start to despair. Taking fierce competitors and convincing them to subscribe to a common campaign without breaching competition law needs strong leadership, passion and commitment, and the time (a very scarce resource) and energy to work together to form an agreed and cohesive plan. It is not an easy nor a natural process for many company leaders. They have big jobs back at the ranch.
I am by no means an expert in the lobbying process but I have spoken to ministers, regulators and civil servants on subjects from long-term care to various aspects of income protection, the size of the protection gap and the need to encourage personal responsibility so that individuals are not burdens to the state. I am learning to recognise that look of glazed helplessness that comes over them when they realise they are being subjected to campaigning. Government cannot just automatically give tax concessions or undertake complex schemes with an industry unless they are not only intellectually watertight but also are supported by a strong core of companies with the will and the shared focus to work together to present a very strong case. Insurers start a couple of goals down because of the problems our regular mistakes have created.
Auto-enrolment might be a very sensible cause for the protection industry to champion but before that becomes much more than a clever idea we have a lot of hard thinking and analysis to do. Have we as an industry the will to do it?
Trying to be more creative than anyone has been before is far from easy, especially given the constraints the industry lives underPeter Le Beau is co-founder of the Income Protection Task Force
The salesman calling door to door gave rise to the rather downmarket image of protection
One would think that protection would be a fundamental building block of a soundly-based society.
Government departments have to develop a rigorous process for testing and rationalising suggestions from industries.