The modest-sized British Friendly has giant plans for the IP market. Its CEO Mark Myers reveals all to Paul Robertson
GOOD THINGS from SMALL PACKAGES
As a relatively niche player in the market, British Friendly makes a virtue out of its small size, but has had to acknowledge some of the larger competitor’s methods in order to stay fully in the game. Chief among these are claims and underwriting systems.
It is certainly possible to make the argument that the mutual sector, large mutuals excluded, is perhaps behind the curve in Big-T underwriting and automated claims systems.
Strangely perhaps, Myers saw systems as necessary due to the society’s size.
“We built a lot of system up front because there’s fewer of us – we’ve got to be pretty efficient in the way we operate. So, we have Big-T, tele-underwriting, straight-through processing, application tracking, and automated claims.”
Cost is often cited by those that do not yet have these methods. But British Friendly teamed up with an Irish firm, Percana, which is keen to break into the UK market.
“I think we got a very good value deal for our members and we’ve had it professionally project-managed,” said Myers. “It’s turned up on time, to budget, so we’re pretty happy. It’s just the price of being in this game for us.”
The obvious route would be, of course, to outsource back-office functions something Medicals Direct is heavily focusing on for the smaller mutuals (see COVER interview, June 2011).
Myers is not keen on the concept, although the society does work with Medicals Direct on the tele-underwriting side.
“It can be quite seductive to outsource claims outsourcing lots of other things as well but I give up my contact with customers very, very reluctantly,” said Myers.
“It looks like an attractive model, but I actually want my underwriters dealing with IFAs and I want my claims people dealing with them. Not because I necessarily think they will do it better, but that relationship is absolutely key.
“If the person taking the phone call at my office is accountable for it, and knows they are going to speak to that person again next week with the next case, they develop a relationship, which is invaluable.”
It is difficult to talk to a mutual about business without asking about the fundamentals of their business model. With a massive size variation, different societies give different views.
The central question is: do you think mutuals can do things better than the non-mutual companies, or is the structure of the company not so relevant when it comes to actually providing products?
Myers said: “I think it depends what sort of size of mutual you are. From my time at LV=, it grew from about a 1,400-person company to a 4,000-plus company. I’m not sure how fundamentally different the mutual model is for them, but I’m sure they wouldn’t wish to give it away ''.
“Mutuals have no God-given right to exist, but if they are properly connected with their members, then they earn the right to continue. If they’re well run, don’t let their expenses get out of control, and service the members in line with what the members want, then there’s an ongoing value to them.”
Myers believes the government and the regulator should take the opportunity to support mutuals and mutuality within the concept of Big Society.
“If anything is more in line with the Big Society, it’s the sort of organisations that enable people to own their houses, to save for the first time and to become much more self-reliant going forward. If that’s not something worth supporting, I don’t know what is.
