Interview - Mark Jones

LV= is not yet a player in the simple end of the market, although, Jones pointed out, it has a simple term assurance market product that works well in certain distribution models. “It’s just not designed really for normal IFA distribution if you like. We’re really pleased with the way it’s been going and that’s been out there for a year or so.”

In addition LV= has a couple of experiments ongoing with very simplified products with little or no underwriting, although Jones again stresses that these products are no panacea for the current market’s woes.

“I think the general products that we, and the industry, have out in the market serve those customers that the industry currently attracts very well. But the industry currently attracts a very small proportion of the potential market that it could get to.

“I see simplified products not as a replacement of the current market but as a way of actually growing the market. And I think that’s far more interesting.
“What we want to do is recognise that one size probably never fitted all, that previously one size was all anyone had available to them. I think what we’re doing is trying to tailor propositions to the market that we’re aiming at or the segment of the market that we’re aiming at. 

“So, in the more traditional IFA market, absolutely, there’s a place for real good quality, good value propositions.

“At the other end of the scale, there is a requirement I think more and more for some instant gratification if you like, although I don’t believe personally that simplifying means that you get a cheaper price.”

Preventing product design

This is not an academic exercise for Jones, as he is a member of the Association of British Insurers (ABI) working group looking at simplified products with the government. Perhaps ironically Jones’ first intention on the working group is to move it away from product design.

“We can engage with them and explain that the way they’re pushing at the moment, all they’re going to get is a simple product which costs more, which is sold through the same channel with the same level of regulation and is guaranteed to fail.

“One of the biggest wins that we could get out of proper engagement is, if we accept it’s a simple product, do we really need reams and reams of paper?
“There’s only one reason in the consumer’s mind that you get a lot of paper: that’s because there are lots of ways of it not doing what you thought it was going to do in the first place.

“A simple product should have a simple one-page disclosure piece. We can determine the channel, we can determine how the product is played out. If the regulation still requires half a forest at the back end, people aren’t going to believe it’s simple.”

For the next few months COVER interviews intend to lighten the economic climate by asking for three market positives.

The first off the block, Jones would indicate this question is rather revealing of personality. He struggles, as would we all, but keeps his nerve and soon finds his feet.