From toilet seat covers in the 80s to Vitality points today, Sammy Rubin has always been focused on innovation, as Peter Carvill discovers.
Sammy Rubin is very accommodating considering that, as the new chief executive of PruProtect, he is prone to being continually busy. When Rubin learns that what he thought was a 30-minute interview is being conducted in a room booked for an hour-and-a-half, he smiles and apologises, explaining that, if that long is needed, he is going to need to be excused in about an hour so he can phone ahead to his next appointment.
Once seated, Rubin is eager to discuss his career to date, his new role, the protection industry and what he thinks the future holds.
"I'm seeing, which is really great, more companies talking about innovation," he declares when asked about the current state of the market. "There's been a lot of talk about innovation but I'm glad companies are actually doing this, and there is change in the air."
Rubin started his first business while still an undergraduate studying science and engineering at Imperial College in London. "It was during the Aids scare of the early 80s and it was a product that was brought over from the US – it was actually toilet seat covers. It was a whole new business. It was basically protection, a health product in terms of hygiene and bringing it to the UK. We looked into deals at Gatwick airport and some hotel chains."
A new beginning
It was not until two years later that Rubin began his involvement in financial services. Still at university, he co-founded Policy Portfolio, which was, he says, the first company in the UK to trade in endowment policies. "We started in 1988 and built it up to a turnover of £30m within eight years. We floated the company, after five years, on the London Stock Exchange because we needed to raise money to purchase the policies."
After brokering the sale of Policy Portfolio to Fedsure in 1996, Rubin took a year off, spending the time in Arizona where his wife ran a wellness clinic. The experience in the US was an edifying one. "It was then that I became very interested in the whole wellness proposition and holistic health planning and strategies for people to take charge of their health."
After returning to the UK, Rubin had a chance meeting with Shaun Matisonn, now chief executive of both PruHealth and PruProtection. "I'd always been struck by the business model of PruHealth," says Rubin. "Here was a financial services company, a health insurance company whose mission was to make people healthy and to help people take charge of their health. It was financial services but it was also about making a difference to people's lives."
Matisonn told Rubin that Prudential was about to form a new life insurance company in partnership with the South Africa-based Discovery and Rubin expressed his interest in the new venture. "The next week I was there and, after about six interviews, they offered me the job of chief executive of the new company."
Rubin is enthusiastic about the launch of PruProtect, a product he sees as truly innovative because of the focus on preventing ill health rather than reacting to it after the fact.
"PruProtect is the first life insurance firm in the UK to reward healthy behaviour.
"We have five dimensions that we look at and these are the five core dimensions for people to take charge of their own wellness: smoking cessation, exercise, nutrition, screening and education. First of all, we encourage people to engage in these five areas. We have deals with three of the biggest gym chains and if people go to the gym twice a week, then they will pay nothing for their gym – we pay for their gym. If they go just once a week, they'll pay just £25 a month rather than £60."
The backbone of PruProtect is the Vitality scheme, which rewards customers for engaging in their own wellness. It is a concept Rubin thinks will revolutionise the protection market. "We've created a balance system so people who engage will get points. The more points they build up, the better status they will receive. Everyone starts with bronze, then they move up from bronze to silver, gold and platinum. Once they start hitting gold, they will see that the annual premiums on their life insurance contracts and their life and critical illness (CI) products will start to come down."
PruProtect also has an approach previously unseen in the UK, which it has developed from the South African model. "The other unique offering is what we call the severity-based approach. And what that means is that most CI policies at the moment cover for about 30 or 35 illnesses and, if you get that illness, you get the payout. It's an all-or-nothing situation. You get the illness and then there is a debate as to whether you fall into the categories or not. There a lot of declined claims so that's how it traditionally works. Nowadays, people are living much longer but they are getting more illnesses. Our approach is a severity-based approach. We pay out based on the impact that that illness will have on one's lifestyle. If someone has a minor heart attack, we may pay out 10%. For something more significant, you get 25% but the policy will stay in force."
Apart from PruProtect, which he thinks will be the most exciting change in the protection market, Rubin seems pleased by the direction the industry appears to be heading in. "There are lots of very good things going on in the market, and these things are all positive. Some of it is just tweaking and refinement."
Treating Customers Fairly (TCF), the Financial Services Authority's (FSA) principles for financial services companies dealings with customers, is also seen as a progressive step. "It'll bring more people into the market. The whole industry is looking for new ways to close the premium gap, and bring more people into the market. Anything that companies can do to actually get more into the shoes of the consumer, to make things more accessible for consumers, help consumers engage, widen definitions and introduce flexibility is all positive."
As for forecasts of changes and shifts in the market, Rubin thinks that PruProtect is going to be leading the way for the considerable future. "I predict more companies will follow us into the severity market and that will be a good thing. I think there's going to be more change in income protection in terms of product innovations. I think that there's going to be continued refinement of existing products."
Rubin elaborates on how companies should be doing their business, and how they should be aiming to close the protection gap in the UK, which now stands at £2.3trn. "We're realising that the market has become very commoditised, and I think that more and more insurance companies are now waking up to the fact that it is not the way to go in the future," he said. "If we're only focused on price, and coming down a little on the price, this is not going to make a significant difference on closing the protection gap in the UK." n
