With a background in general insurance, Darren Spriggs brings a fresh perspective to the protection arena. Paul Robertson interviews the new MD of Ageas Protect.
With 98% of Ageas’ new premiums coming through the adviser market, the firm is securely wedded to the advice model for the foreseeable future, although it does have a few partnership relationships started last year to replicate the Ageas’ GI model of a multi-distribution approach.
The insurer expects to be a net gainer from the Retail Distribution Review (RDR) next year, partly because of its system-based, easy process, quick approach. But it has pinpointed a few risks associated with certain entrants to the market, such as restricted advice panels.
Spriggs is open that Ageas’ 2010 results were impacted by the demise of Click, leaving the firm with perhaps a heightened sense of risk in this area.
He said: “There is an element of the intermediary market place where it never ceases to amaze me that people exist in one shape or form, only to disappear and re-emerge six months later in another shape or form.
“We are taking active steps where we believe risk exists. Particularly in the context of RDR where we can see that, for some intermediary business models, we question whether they will be sustainable as we get into next year. Then we will get a really clear view as to what the genuine amount of new business actually is, rather than those that rely upon a certain degree of churn.
“We are actively monitoring that and we have taken steps to reduce the amount of new business that we write with particular intermediaries.”
Essentially, Spriggs is a fan of proper advice. He is also not necessarily against a product being sold without advice – if the product is suitable – rather he is wary of the restricted type of advice, asking whether it is holding enough value-added to qualify for the extra cost.
“People need to ensure they are adding value in the advice they are giving to make sure that it is perceived as being clear value for money.” On the subject of value for money, with his background in the guaranteed acceptance plans for the over-50s, it would be remiss not to talk of simple, low or no underwriting products for the protection market. Perhaps unsurprisingly, he sees an opportunity.
“For me, it is about how can we wake people up and encourage them to be aware of how they can make the first step of the ladder. “Why not a guaranteed acceptance-type product, when is it value for money compared to an advised product? I see these types of products being sold alongside some more classic GI-type pieces, where there’s an add-on or as a standalone.”
Obviously, these products would be sold without advice, with the intention of providing a feeder pipe – a good opening, for firms to give advice to their next generation of customer. By now, it has become apparent that a fresh pair of eyes really can highlight what has been staring the industry in the face for years. So, if there was one systemic thing in the protection markets that Spriggs could change, what would it be? Perhaps inevitably, the answer is a list.
TAKING BOLD STEPS
“For me, there are a couple of things around the industry as a whole where I think we have to be brave,” he said. “Where we have to look at the things that maybe don’t work as well as they need to from a customer perspective and we need to force change through.
“As an industry at times, we get close to change, but then we pull back at the last moment. We talk a good game but on some key things, whether it is around products or service, it is a first mover-type thing.”
This is a fair point, but Spriggs swiftly moves on: “As a general insurer, coming in and looking at indemnity commission, you go, ‘Really?’ I spend quite a lot of time listening in to our service operation down in Reigate. And on occasion, I hear people changing their product which may only be a year or two old for 25p saving a month.
“Don’t get me wrong, customers have to have value for money. But I wonder how much on occasion we are artificially creating a market for change. And they are fundamentally driven by the commission models that exist.
“The speed of change is restricted partly because nobody can move away from those commission models. You can’t go without it, otherwise where would your cash flow come from as an intermediary? We need to look at some creative ways in which we can try and break that cycle.
“The whole aspect of customer retention in the GI world is very much understood. It is a science, there are a lot of tools, analysis and techniques behind it. Then we look from a life perspective and everybody is focused on new business.
“There is a need for us to ensure that we are doing the best by our existing customers. This is why I support in principle the protection awareness-type message, not in the way in which it is currently derived, but which communicates to be sure people know what they’ve currently got.”
Perhaps more controversially, Spriggs believes the pool of people within the industry needs to be refreshed in order to get these new ideas and new evolution coming in.
“I think as an industry, we have to challenge some of the things that we haven’t been able to crack historically. I think we also need to support and encourage a new gene pool to help us move forward.
“That’s why if I look at Ageas Protect, I look at the workforce and we have got a good balance between technical people and customer people. That is why we have to stick to our pillars of success from my perspective, which is about service, technology, processes, products and making sure we’re spending enough time thinking about those things.”
