Read the full transcript from Tom's keynote speech at this year's LifeSearch Protection Awards.
Welcome all and an especial welcome to our several fellow intermediaries here for the first time. It’s an honour to have you with us.
Do you know, the two most interesting slides I’ve seen this year were from the Scottish Widows Protect launch.
It’s great to see that iconic brand back in our market, and with real ambition.
We do need more ambition as SLIDE 1 their first slide shows.
Since the demise of the tied sales force gave us a boost, the intermediated market has been horribly flat for too long. And the direct one has been no better.
But not for want of new launches –
In addition to ScWids, Canada Life came back into individual protection, partnering with UnderwriteMe to boot.
And the American’s invaded, and now AIG has real ambition to dominate – as a good Yank does!
Royal London shook up their brand and strategy really well, partnered with UMe and allowed us to delegate underwriting data entry to our clients which is worth a try.
And, though it’s direct not intermediated, we applaud Sun Life’s efforts to replicate their over 50’s success in the more elusive under 50’s market.
And Kevin Carr consulting tells me that both Vitality and British Friendly’s latest product enhancement have been applied retrospectively to all their policyholders.
Well done, do all make that the new hygiene factor standard as you update your offerings please.
But will all this effort grow our engagement with consumers and families who mostly have no current thought to buy the protection they need?
It is our greatest challenge. How do we otherwise break out of our flat line?
Well, LifeSearch isn’t flat-lining of course, and seeing this is LifeSearch’s do, and the FCA does not as yet seem to mind us using our prosecco to induce you to listen to me for 8 more minutes, let’s start with what WE are up to.
But know that within our story is a challenge. For LifeSearch is striving to grow our market, in truth that’s what all intermediaries do as their day job if you think about it;
But my challenge to you insurers (and reinsurers), and I’d like it to be the cornerstone of every strategic conversation you have with LifeSearch from now on is, “What are YOU doing to engage consumers and grow the wider protection market?”.
In the end that is of key commercial importance to us and if you want us to support you it should surely loom large in your business plan.
As for LifeSearch, we are one of the ‘habitual writers’ in this SLIDE2 second slide that shows just 600 intermediary firms writing more than just £100,000 of Annual Premium Income a year and between them dominating the protection market.
It’s not just consumers who have stopped engaging with protection!
We think the numbers I’ll tell you in a moment make us the largest of those habitual writers and in truth we see a vast even global gap for a firm of real scale and efficiency, one whose USP is simply that its people explain things online and off fairly and clearly with customers' best interests at heart.
Simply put we think LifeSearch can become a very great business if we stay true to what we know to be right when it comes to serving customers best.
So if that’s our big hairy ambition, how do we get there? It takes much more than a bit of scale and habit after all.
SLIDE 3 That up there is LifeSearch’s purpose. Back in 2007 we worked out that that was exactly what LifeSearch wanted to do and it still resonates within, driving us all on daily. To understand us you have to understand it.
But to start with it’s those first two words that are a bit of a problem aren’t they? New age stuff from a balding insurance bloke in suit specs and moustache! Unlikely?
Well, LifeSearch is not a charity, but given that we think the job we do (the one we all here play a part in – protecting people properly from the financial effects of personal catastrophe)
given that job does good for those it gives peace of mind, is often almost life-saving for the unlucky enough to have to claim, and as it helps them keep themselves together, is by extension good for society;
given all that, it’s logical to love doing it, because we all love doing good when we get the chance.
Internally, LifeSearch uses a very exact ancient Greek word which means just that – Agape, the love of doing good. It works really well to get our whole team wanting to do it right most every time.
But we are not all sweetness; we are very ambitious and driven. Hence that second phrase of our purpose.
And we also think we are professionals who know what we are doing and should be listened to, as per the last phrase.
That might sound arrogant, but in truth if you deal with the public all day every day you know that mistakes and failures are inevitable, they are why you have a coaching team, a best practice team and a complaints team, and in the end professional indemnity insurance.
So there is no arrogance here, rather just a steely determination to be very good as well as very big, And to combine the two in a way that’s perhaps rare in global financial services.
So where has all that Agape and steely determination got us so far? Well last week it had our little business protecting,
both online and off,
a total of 1284 people families and businesses (in a week)
through 1727 policies of Life, FIB, CIC, IP placed on risk.
annualise that and we’re writing 75,000 policies a year.
That’s more than you expected!
In truth some of that scale is new to us, it arrived last month when Sergei and his team at Compare the Market yielded to our 5-year long effort to convince them to let us unite their online and offline user journey to better serve their customers.
And so grow their business and the market.
Now, we like to measure our progress in families protected, but the world measures success in money and as today’s press release will tell you, our last FYE back in August SLIDE 4 saw
our turnover net of shared revenues rise 13% to £22.3m;
that led our gross profit to grow 13% to £5.7m
which led to a pleasing 17% increase in EBITDA to £1.5m,
which we declared as an 8% higher pre-tax profit of £1.1m.
Those are sound growth rates in a broadly flat market, though of course our ambitions SLIDE 3 AGAIN need consumers to really want what this room produces,
hence my challenge to you,
for of course they don’t really seem to, just now, or at least not that many of them! Oh dear!
Well we at LifeSearch are pretty good at engineering access to the ones that do, so there is still room for us to grow here, but it’s time to start exploring foreign fields, so we seek our partners’ permission to serve them here from a full LifeSearch branch in Cape Town, which in time can allow us to develop a model that suits that local market and then to take that learning and export locally suitable versions of LifeSearch wherever we can in the world.
But that’s still a dreamscape, what’s real is that in the UK consumers increasingly expect to research our products and services via their handheld devices, but then find themselves not wanting to actually contract in the same way or with the same degree of convenience.
Several of you are developing products to address this through simple quick buy processes and we are supporting some and would love to support more as we work out how best to ‘reassure or rescue’ those many customers who drop out of that process for whatever reason.
That ‘rescue’ role is one we invented at scale and we have now used it to protect 10’s of 000’s of people via Moneysupermarket, Go Compare and Compare the Market, people and families that would not otherwise have gone ahead and bought cover.
We know that, because many tell us that they only went ahead because of the quality of our service and advice.
But back to the tech-driven near future; by their nature the buying journeys to those simple products cannot offer choice – choice is the enemy of simplicity – but in time we think that Direct to Consumer single tie cover will account for a significant part of pure online business. The rest, and I think the online majority always, will be served through price comparison.
Which means that those consumers who want simplicity and those who want choice will be well catered for.
Of course online choice needs to be simplified and clarified and that’s much harder when dealing with many insurers, so change in the world of choice is slower than in the world of simplicity, though we work hard to drive it through as fast as possible.
A key part of this is our advocacy of Underwrite Me. Our advisers use it with increasing efficiency and pleasure to guide customers through a range of providers and then to buy, all in real time.
We’d urge those insurers who are not yet getting themselves onto that platform to do so and we’d urge other platforms to compete better than they are.
You know, UMe robs LifeSearch of several of our strongest differentiators, but that’s life, we and you must find new USPs not let our fear of the risk to our current business model stop consumers from protecting themselves more easily.
If we are to engage them folks, then we must put the consumer first.
Now I’ll end if I may, SLIDE SEQUENCE 5 with an update on something I think I’ve previously confused you with: 2 years ago I told you that we were exploring the idea of becoming a partnership and then last year I told you we had we shared out around 25% of our profit between 127 of us who had been here three years.
Had we not done that our profit growth this year would have been almost 40%, so perhaps it’s worth explaining again why it may not be shareholder lunacy to give all this money away.
You see after 30 years of running advisory businesses we know that the key to delivering good advice is the wisdom that comes from longevity in a role. And to make that the norm requires the innate conflict between career development and serving the customer long term to be institutionally removed.
And the models that promote that loyalty and continuity best in all the advisory professions are partnerships. We think that logic can equally apply to our simpler, but no less important advisory world.
And this year, last Thursday was our 2016 Partnership Day, the day on which our 2nd profit distribution hit our pay-checks. We’ve just shared out 10% more £’s than last year between 6% more of us. Good news all round as that happy newsfeed shows.
So our profit sharing is not peanuts and it’s not nuts, we hope it will be the foundation of a business model capable of delivering our SLIDE 3 AGAIN purpose on an international scale.
Now don't get ahead of me, we have no concrete plans beyond being the firm that arranges 1 in 10 of all Life CIC and IP policies in the UK, and opening up that branch in Africa, and we are only into the 3rd year of what I originally envisaged as a 5 year learning curve as to how best to foster genuine loyalty to LifeSearch’s customers.
But I really like the way it’s going, we are a happier, better and more ambitious place now, and we weren’t bad then!
So that’s us, and a bit about you, and a challenge too (as you’d expect), for what we most need to do, you and I, is work out how Protection becomes genuinely relevant to the man in the street once more.
I can’t help thinking it’s something to do with Income Protection, the policy which leads to more claims, not Life, which leads to ever fewer.
How’s about a really properly sponsored nation-changing 70 families campaign, or a cracking D2C Income Protection journey Dean, both with proper consumer and protection insurance engagement campaigns, call them CPIECs for short?