Often, people say what they think others want to hear rather than the truth. Peter Carvill hears from Mark Jones about getting to the bottom of what advisers and consumers really want
Like those who enter the ranks of the Inland Revenue, the brigades of traffic wardens or the armies of road cleaners, nobody spends their childhood aiming to grow up and enter an insurance-based career. The same is true with Mark Jones, head of protection marketing at Friends Provident.
"Like a lot of people, I had very, very little idea about what I wanted to do. Even when I went on to college, I started off doing a business studies degree, got a bit bored of that after 12 months and transferred to an accountancy degree. And then realised I didn't want to be an accountant so spent two years as a president of a student union which was a fantastic business education as well as a social education."
With this period being the first half of the 80s, and in the period that Margaret Thatcher and the country's striking miners were on a collision course, it seems that the students at Huddersfield Polytechnic preferred Jones' non-political stance.
"I was elected on a strangely apolitical ticket. I'm not sure what happened in that respect. It was a normal college for the 80s where the candidates were either right of Attila or left of Karl Marx as a rule. I managed to get elected on the basis of doing something rather than being political. It was aimed at what the students there needed at the time - there were problems with one of the courses that was under threat of closure, with the student union building that needed to be moved, with some of the finances - it was the micro rather than the macro - although I wouldn't want to read too much into the results of student union elections."
He continues: "That's a lot of years ago - £750k turnover, 26 staff - you learn quite quickly that theory and practice don't work so well - you have to make some compromises, be able to deal with people, bringing them together as a team. That was challenging but great, great business education really."
He goes on: "I still think it's one of the fundamental paths that helped me understand how organisations work and that what people say to you isn't always what they mean - there is that need to go a little beyond, not because they are trying to mislead you but because there is a natural tendency for people to tell you what they think you want to hear and you have to really probe a little more to get people to be brutally honest sometimes."
Valuable research
This experience provided a good base for working in insurance, particularly in how companies interact with consumers: "You can ask glib, overlying questions when you do research, be it with advisers or consumers, and it's all too easy to get self-fulfilling answers to the questions you want. As an industry, we can sometimes be guilty of being very happy with those answers: 'We haven't got any problems because our research tells us we haven't got any problems.' If you're not particularly careful at times, your research can tell you what you want your research to tell you. I think everyone does in this industry, not just in Friends Provident, but I think we're getting far better now at losing that touch of arrogance of thinking we always know what's best - I think we're getting more inclusive. We've been getting better at talking to advisers and asking what it is they want, rather than trying to tell them what they want. And I think we're now going to that stage beyond and talking to consumers, asking them what it is they want rather than telling them what they want. This is a positive thing for the industry in going forwards. Not doing that in the past created quite a few of the problems we've got such as retention."
Looking towards the future, the big sea-change has been the introduction of the Welfare Reform Act, doing away with Incapacity Benefit and replacing it with the new Employment and Support Allowance. It is, the Government intends, a move to reduce the numbers of those dependent on benefits by 40%.
"The Welfare Reform Act is one of those that could have a positive impact on income protection (IP) sales but it's not going to double IP sales overnight or anything silly like that. We've got to recognise that the probability is that somewhere between a quarter and a third of those people who currently qualify for some form of Incapacity Benefit won't under the new approach that the Government is taking. Not all of those people will be appropriate to sell protection products to. You need to get to a certain level of income before you're better off with IP rather than relying on state benefits but a large proportion of them would be. So it's one more impetus, one more reason to get back in touch with a client base and have that conversation which there may not have been time for first time round."
A new direction
Casting an eye back to the protection industry and the issue of how it communicates with consumers, Jones is critical of the direction that has been taken following the adoption of the Association of British Insurers' (ABI) definitions of critical illness, which was introduced earlier in the year.
"I personally think that the prevalence of conditions under critical illness (CI) has the potential to become a problem. It does sound like a strange position to take in thinking that there could be a level of detriment in having more and more conditions on a CI plan but my concern is that the ability to understand the offers out there is becoming more and more difficult. We went through a stage of standardising under the ABI, and we all pretty much knew where we stood at that point, with all the advisers of any experience knowing what was and wasn't being covered.
"Now we live in a competitive market and there are an awful lot of very good things about being in a competitive market. People started to compete on a number of conditions. Some had extra value, but with some it's less easy to see what extra value they have or whether they are splitting certain conditions. But you end up with large numbers of extra conditions and you are asking advisers to then choose between the merits of number of conditions, price, process and brand. I think we are in danger of making life very or more difficult than it needs to be for advisers, and that does concern me a little bit. The market has shrunk and it seems to be settling at the moment but I do have a concern that the more we compete on the numbers of conditions, the more difficult it would be for advisers to give best advice on the best product for the individual in front of them."
Hardest hit
He adds: "I think CI sales have been hit more than the life sales which is probably due to affordability at the moment rather than anything else. Protection sales haven't been growing massively for years - but when you see the protection gap growing or stabilising, the numbers are too large for us to understand what's going on anymore.
"The need is being trumpeted by advisers and providers, yet it is not being fulfilled - something is going wrong somewhere along the line. That's the thing we're losing - the ability to engage with consumers. Consumers are getting more informed in so many ways, and I would love to think that the more informed consumer is more likely to buy protection and be more likely to understand and recognise the reasons for it - it's such a compelling thing, yet it is not coming across. Somewhere along the line something is upsetting the balance. And I wonder if we're in danger, in the CI case, of making it too clever or complex."
CV: Mark Jones
2007 - to date: Head of protection marketing, Friends Provident
2006 - 2007: Products and actuarial manager, Friends Provident
2004 - 2006: Protection actuarial manager, Friends Provident
2000 - 2004: Various actuarial roles on the protection team, Friends Provident.
