Legal & General's senior operations manager for claims and medical underwriting is keen to improve consumer awareness and understanding of his industry, as he tells Lucy Quinton.
Recently listed as one of the top 25 most influential industry movers and shakers by COVER, Stuart Johnson is a surprisingly quiet and unassuming individual. But Legal & General's senior operations manager for claims and medical underwriting is someone hard to ignore.
Johnson fell into the industry by accident when he was living in his home country, South Africa, and has not looked back since. He is genuinely enthralled by the industry, a sentiment best shown by his enthusiasm about discussing any and all things industry related.
His passion and dedication to the industry is typified by his decision to become involved with a sub-committee of the Association of British Insurers' (ABI) Treating Customers Fairly group, which aims to raise consumer awareness about the industry and promote a positive message.
"We need to get out there and reinforce these positive messages to the public," he says. Possible ideas include producing a DVD that reiterates the importance of the market on behalf of the whole industry, rather than just one company doing so to gain a competitive edge.
Johnson's day job is to ensure the consistent deployment of Legal & General's philosophy among 280 staff split over five offices, which look set to extend to six offices following the takeover of Nationwide in January next year.
In his current role, Johnson is drawing on his wealth of market experience, having spent many years moving around different companies and progressing up the career ladder, with stints at major providers such as Unum and Bright Grey.
Having moved around the industry, he has spent a great deal of time working with the IFA community and explaining the workings of underwriters and claims teams that are so often ill perceived.
The industry's perception of underwriters is slowly changing and Johnson is a firm advocate of ensuring that his profession is no longer seen as a group of people shut away in a room lacking natural light. Instead, he says that as they are an integral part of the distribution network and sales process, they should be seen as such and encourages underwriters to get out there. "A lot of companies are coming to realise that underwriters should not be locked up in back rooms," he adds. "Protection is the life and soul of Legal & General and underwriters are the life and soul of protection", he says, explaining just how important he thinks underwriters are to the overall business.
On the front line
Johnson fully acknowledges the importance of intermediaries, saying that essentially they are like "frontline underwriters". He believes it is important to educate intermediaries to help them understand and "give them some hints and tips" about what details the underwriters look for in a policy application and drive home the importance of disclosure, which, as he explains, is very topical right now.
Over the years, underwriting has become more sophisticated, despite the majority of declined claims due to non-disclosure meaning that perhaps there should be even more thorough underwriting. Johnson defends this, saying that application forms have become more sophisticated and less ambiguous over the years due to the increase in their length, ensuring that underwriters are not leaving anything open to interpretation.
The industry is simple, he explains: "Tell the truth, pay the premiums and we'll pay the claim.
"The protection market is doing a fantastic job for society paying out a fortune each year and is an essential part of the real world today but it is unfortunate that it has picked up a lot of bad press," he says.
Johnson is pleased and eager to participate in an industry that is actively engaged in addressing the issue with the ABI's Treating Customers Fairly group and the formation of a sub-committee.
Johnson further reinforces how important the industry is by quoting Dr Marius Barnard, who said that while he was the medical doctor, the industry is the equivalent of a financial doctor and should stop beating itself up. "We categorically do not look through our claims information and look for reasons not to pay, but in fact, the complete opposite," Johnson says.
He acknowledges the perception the industry has in society of deliberately looking not to pay a claim but says it is important the industry puts itself out there and educates the consumer as to what they need and to help them understand that any cover that they take out is a legal contract. "I don't think there are people out there really looking to defraud the industry. The industry, instead, is looking to clamp down on those who have deliberately gone out of their way to swindle the sector," he says.
Johnson believes another way for the industry to get the message across to consumers about financial protection is to publish acceptance ratios, which would show only around 2% of people are actually uninsurable because they are undergoing investigation or have had a critical illness recently.
He says society is apathetic and relies too much on the mantra that "it won't happen to me" and still think financial protection is a luxury rather than a necessity. Latest statistics provided from the Protection Review and Swiss Re about the multi-trillion-pound protection gap need to be repeatedly reiterated to consumers and Johnson seems to wholeheartedly believe that "IFAs and intermediaries are doing a fantastic job in getting this message across".
The protection industry has changed massively since Johnson started his career. It has moved far away from unit-linked type products and other similar products due to bad publicity and has moved to a commoditised term-based cheaper product, he explains, adding that the industry should promote what it already has as it is vastly undersold and is not understood properly. However, he also says the industry needs to look again at some products such as critical illness (CI). "It's a fantastic concept but the UK market has complicated it. I was in the South African market when the concept was conceived and it was a very simple idea. Even today, the vast majority of claims are still coming from the top three diseases," he explains.
The main differences he says between working now at a big provider and a small provider, experienced when he worked for Bright Grey several years ago, is down to volume. Having volume and market presence enables a company to do more things that are not possible with a smaller organisation. "Because of the size of Legal & General, I have possibly the biggest underwriting team in Europe and we are continually looking to improve," he says.
Previously the provider had an academy with Cardiff University for junior underwriters but it has now expanded this to the most senior underwriters in the business and enables them to specialise in certain fields. The updated academy that was launched earlier this year is an example of how Johnson is seeking to improve the quality of the underwriters in the Legal & General business. "My aim is to have a specialist in each field at every site so they are able to be used as a point of reference," Johnson says. The programme has cost in excess of £150,000 to put together.
The academy is being hotly anticipated by Johnson, who is full of praise over the value of having face-to-face tutorials as opposed to other programmes that are simply online modular courses.
The value that the provider puts into its staff's welfare is clearly of paramount importance. Not only is this shown by the introduction of this new academy but also through the launch of the firm's "Culture Club", a club designed to encourage a positive attitude to working for the provider. He says he wants to encourage attendees to wake up and feel excited about working for Legal & General but says he is satisfied when his colleagues wake up on a Monday morning and do not feel "yuk".
With such a charismatic man in the industry, clearly dedicated to doing such a thorough job, there is perhaps more than a glimmer of hope that the ever looming protection gap could start to slowly decrease. n
