Bupa Health Assurance's Steve Payne talks to Paul Robertson about its future as part of Friends Life
Coming out of the other side
What of the Defaqto five-star products? Will the combined firms continue Bupa’s relationship with the product analyst?
Payne again stressed the best of breed aspect, before explaining Bupa’s Defaqto philosophy: “I would expect that we would come out with products at the end of the year that are at least as good as the Bupa products are at the moment, so we would assume that they would continue to attract the five star Defaqto rating they do at the moment.
“While we are pleased that our products are recognised by Defaqto, they were not designed with the standard in mind.”
When it comes to the systems behind the products, Payne is in the Rumsfeldian ‘things we know we don’t know’ category, but makes a brave stab at the subject.
“Bear in mind that we are only on our second working week here. It’s fair to say that this is completely up in the air, but the intention is the same as for products: we are going for a best of breed method.”
Of course, all this is in the future, but what of now? COVER worried out loud about what will happen to Bupa products bought now. Most are well aware that there is room for problems when claiming on products from companies that no longer exist.
Payne is unable to discuss figures, because of financial reporting restrictions, but said that Bupa’s sales remain healthy. He added: “Our products will remain available for the vast majority of the year and I would hope that they continue to sell.
We will definitely be bringing the claims capabilities together, but we will bring everything over and running existing policies with our new business.”
He dismissed concerns over difficulty, claiming: “That may be a scenario when businesses are closed, but we are open to new business and will continue to demonstrate the Bupa values we brought to this mix in the first place.”
The Bupa deal is, of course, just one of many consolidations and closures the market has seen over the past year, yet Payne is sanguine about the market.
“If you look at the ABI market statistics, we see a steady, or even stagnant, market. It has not grown in the way it did five or ten years ago. What we are seeing are companies reassessing what were highly ambitious growth plans,” Payne said.
“Businesses are going to organise around areas they see a clear advantage in, where they can bring a decent focus. In our case, you see consolidation by investors deciding what should be the focus of all the businesses involved.
We are going to clearly be focusing on protection at the high quality value-added end of the market place.”
Maybe we are seeing firms choosing which area they play in rather than continuing with propositions which do not bring returns for the shareholders.
Payne obviously feels strongly that focusing on what you are good at is no bad thing; that this is a way to a stronger business. He said: “IFAs may not be so enthused at this, but the market certainly still has a spread. It is not as if all this consolidation is leading to any sort of monopoly sort of situation. There is plenty of competition still out there.”
There certainly is, and one part of that is a growing sector of short-term or cut down products, many sold by bancassurers and general insurers, essentially soaking up the PPI market. Payne remains unbothered.
“If we are talking about an expansion of the market and it is done responsibly, then these products are not a bad concept,” he said. “It is perfectly natural for firms with certain avenues of distribution to look at products that are appropriate for that distribution.”
There is even a hint for the future: “I suspect this is something I am about to learn about because in parts of Friends Provident there are areas of controlled distribution. For the right relationship, we too would come up with products attempting to meet the needs of that distribution. But bear in mind that this is all still hypothetical.”
The market would obviously welcome some trusted brands in this sector. Would other insurers follow? Payne shrugged. “Presumably so.”
Definitely one to watch.
So, in conclusion, through all the confusion, what does Payne see as his core job in this time of flux? “We just need to be good at telling the market what we are doing and what we are focusing on. And we need to match delivery to the promise.”
Well, you cannot say fairer than that.
