As LifeSearch's link to protection providers, Emma Thomson sees good things on the horizon. She tells all to Fiona Murphy
These are interesting times if you are a senior employee at a protection provider - and not in a good way.
Recent moves have seen major management changes at Friends Life and LV=, while Royal London's rebrand of Scottish Provident and Bright Grey has led to a few casualties already. Add to this mix the fact that Ageas is being bought by AIG (although hopefully this won't result in job losses) and it's clear there is a considerable level of instability amongst the big players.
As life office relations director at LifeSearch, one of the largest and most proactive protection specialists in the market, Emma Thomson is charged with talking to these firms on a daily basis. So does she expect repercussions in the advice field?
She confesses surprise at the moves, but is sanguine: "The reasons are each very different - it's not like there is a common theme for people leaving. But there's no getting away from the fact that it is tough at the top in the protection market. It's hard to generate profits and there are lots of challenges, regulation and so on."
Thomson sees it business as usual at providers. "It is quite interesting that the same faces pop up in different guises. So you follow people around. So all we will do is just make sure that we meet with those people, help them understand the LifeSearch market if they haven't already engaged with us, and try to build up those relationships.
"But ultimately it's not just the person at the top who's important, it's the team around them too. And the teams around these people are remaining. The relationships with the people on the ground, the people who are making the day-to-day decisions, are really vital.
"Are we worried about it? No, we're not. We think [LV= and Friends Life] have still got very strong propositions, even without those leading figures, and we will just continue business as normal."
Market changes
However, there are changes in the market that will not be business as usual, with many new systems and support services coming to market, including quotation systems like UnderwriteMe. So what's the LifeSearch verdict on those?
Thomson is pleased that Exeter and Scottish Provident were the first two to go live with UnderwriteMe. "Both those firms will be freely admitting their customer journey wasn't particularly brilliant, which is why they've partnered with UnderwriteMe," she says.
"I'm really excited that the customer journey will be far better for both consumers and, obviously, intermediaries in terms of quoting the business. Insurers need to make sure they are keeping on top of their systems, and some are always better than others."
For LifeSearch, the change most welcomed over the past year is a more incremental one in terms of improving its stroke and heart attack definitions. The thinking is that this will enable more customers to claim and will remove the disappointment for people who fall through the cracks because they haven't quite met the definition.
Thomson explains: "In terms of the reputation of the industry this will definitely, definitely help us. The vast majority of claims do get paid but this
just helps to emphasise that, and it makes it a lot easier for advisers to be able to
sell the products because the definitions are simpler."
Rewarding loyalty
Thomson's biggest bugbear is a prevailing focus on new customers across the market. "I would just love to see an end to existing customers being forgotten about," she says. "There's a lot of the ‘brand new customers only' approach, with definitions helping people applying today, but loyal customers just don't seem to get a fair crack of the whip.
"They are customers who will be cheesed off, as they see that new customers could be claiming on something they themselves can't.
"We could be doing more to protect the existing customers and make sure we are not an industry that is encouraging churning. Because that's effectively what needs to happen; people just have to keep reapplying."
A sterling example of a firm getting it right is Beagle Street, which recently upgraded its critical illness plan and highlighted improved wordings of 11 conditions. Assessing the changes, Alan Lakey, director of CIExpert, commented: "Commendably, Beagle Street is backdating these wordings to last July and will be revisiting any declined claims to see whether they would now meet their
claims criteria."
Thomson hopes this will become a trend: "We spoke to [Beagle Street] about existing customers needing to benefit and it has now announced that all its existing customers will be benefiting from the changes it has implemented, which is fantastic news. So we know it can be done, and that's what we'd like to see in future."
Thomson admits she has spoken to other life offices about this issue in the past but says there were always obstacles. "There's nobody saying no, but it then comes down to ‘our systems can't cope with that', or ‘we've got a reinsurance treaty now with X reinsurer and five years ago we had it with Y reinsurer', or ‘ we've increased the coverage and our rates have changed'.
"That's not necessarily a barrier; I think we just need to be helping customers to understand that the industry has moved on and improvements have been made.
"Communications need to be far better so customers are made aware that their product has now been replaced with a better one. But there should be processes in place to automatically apply them retrospectively.
"Providers need to be thinking of the future and about how existing customers can benefit from changes they're going to be making in the future, rather than just building systems for the current approach of once you've gone on the books, that's it, the policies can't be changed."
Getting back to growth
LifeSearch is one of the few adviser firms at the forefront of attempts to grow the protection market and has worked with many providers over the years on various projects. However, we've seen the market falling in recent years, so what will it take for it to start growing?
Thomson has no silver bullet solution but favours increasing awareness about looking after personal health. "I don't think any one thing will change," she says. "Social media is important but it will have its limits. People don't want to log on to Facebook and be pushed to buy life cover. Through Twitter, we've got our health facts campaign and the Aviva campaign for us was fantastic.
"There's another insurer that will shortly be announcing a multimillion-pound campaign, which is absolutely brilliant for us to hear. But again, to some extent, that has its limitations."
LifeSearch hopes industry efforts to lobby the government and get it on side will help the awareness cause. "I know the ABI is trying to influence it", Thomson says. "The Income Protection Task Force has tried as well. I think it is definitely time for individual groups across our market to come together, to work together as a team effectively and to try and get the government engaged.
"The government obviously wants to reduce the burden on the state and it can do that by working with us and having tax breaks for consumers, making sure consumers are not penalised for self-insuring."
Thomson cites pensions as an area in which awareness has been successfully increased: "It took them a long time, but it's now clear to everybody in the UK that if you can, you should be sorting out your own pension, whereas before, [the government] didn't like to say that, because that would be admitting pensions aren't going to be for everyone to be comfortable in their old age.
"We just need that message now when it comes to protection, which is why obviously the Seven Families initiative is important to try to help illustrate that.
LifeSearch is also planning a lot of work in terms of reinforcing its culture, making sure its staff feel fully engaged in the business and are aware of what LifeSearch is trying to achieve.
"Our key focus is really just to protect families, we're not looking at numbers anymore," Thomson says. "It's actually now about how many families we are protecting every day. So that's a big change for us.
"We strongly believe that if you can get your people to be more responsible for each other and to have more of a caring culture, that will filter through to the way we look after customers - which has always been strong, but we're trying to reinforce it."
LifeSearch is upbeat about the year ahead, citing the Seven Families initiative, UnderwriteMe completely revolutionising how people process business, AIG's deal with Ageas, and Scottish Widows coming back into the market as just some of the reasons for optimism.
"I think next year is going to be really quite different to where we are today, and that is really quite exciting", Thompson says. "There is a lot of negativity about our market not changing and some of that is fair - we can be far more radical and really, really change.
"But, at the same time, we are making things better and we have to be proud about what we do. We are helping people when times are bad, so we should be proud of that."
