Read the full transcript from Tom's keynote speech at this year's LifeSearch Protection Awards.
Welcome and thank you for coming.
Today we honour the insurers who strive all year to help us protect families and businesses and who, just when it is most needed, pay the claims that make that protection real.
We also have with us, many of the amazing people LifeSearch has facing our customers and helping consumers make really good decisions.
Some of the best of them are here today, do ask them all about us and why we claim that we are a radically different business to work for and buy from.
But there is no doubt who are the most important people in the room today,
are our super brand marketing partners.
There are of course some very fierce rivals amongst them and we are grateful that that they trust us to keep their secrets and allow us to serve all sides so as to protect as many families as we can.
We are indeed honoured to have so many of Protection’s leaders here today, leaders both in trading and thought.
LifeSearch has had a great year. If you measure that in profits then our very strong 2015-16 numbers, published today represent a proper step forward.
But the truth about LifeSearch and profit is that as a founder-led and director owned business we value it just behind how much our clients love us and the number of them we protect.
A business should be clear as to what it is for.
That’s our purpose and we relish it, we love protecting 1500 families and businesses each week by arranging 2000 policies each week. We dream of putting another nought on those two numbers and seeing where we go from there.
As for the love thing, it IS possible to do a normal office job and still love your work if you have fun doing it with lovely people and see it as doing individual and social good. Perhaps as a result of that, our clients love us too! A net promoter score of 81% is not the norm in financial services of any sort, nor is a 9.5 rating on Trustpilot.
We love the strength of these results as much as we love our growing financial strength.
We like to think we are proving that even at quite some scale, a retail financial services business that genuinely puts consumers first can do really well too.
That’s an often made claim, the putting of customers first. One doesn’t often get shown continuous structural evidence though.
In our case the proof is that very unusually at our scale, we persist with the expense and hassle of offering our advisers the widest possible choice of policies with which to help our customers. It costs us, but we do it because some consumers really need that choice.
Of course that gives us a rare and comprehensive overview of the whole of the protection insurer market.
So enough about us, what about you?
We see L&G under new leadership continuing to win huge market share and now they’ve joined up their UK protection business to their US protection business, we expect serious innovation from them as they respond (as they have to) to the rapid growth of once scarcely relevant competition.
At the other end of the market, Iain Clark (once of L&G of course) moved from LV to head up the much smaller but very important British Friendly. We love the way he’s striving to make mutuality and income protection resonate with consumers.
Back in the land of giants, at Aviva, the merging in of the best of Friends Life is at last complete and we hope for much this year from their new leadership team now they can put their energy into driving their strong brand forward.
AIG is another one that’s been firming up its management team, but also managing to launch an excellent new CIC concept; and break real new ground in seriously improving our ability to serve our existing customers with them and best of all leading the way on pre-payments for funeral expenses.
Beagle Street have continued their edgy TV marketing campaigns, doing more to help to raise the profile of protection than many far bigger offices and becoming serious online players in very quick time.
Canada Life and Old Mutual Wealth have strengthened their propositions in partnership with UnderwriteMe. And it’s great to see The Exeter back in the game with enhanced products, whilst LV=, Zurich and Aegon have been investing in systems and service to improve customer experience, it’s unglamorous work, but as key customers we are grateful for it.
Scottish Widows continue their steady move back into the intermediary market. We intend to make them a leading business protection writer as they let us advise the huge customer base of the Lloyds Bank SME division on their protection needs. Could LifeSearch open up business streams for your insurance company too?
Another legacy brand, Royal London, is a year ahead of Widows on the comeback trail, and of late has been doing the protection tight-rope walk very impressively, balancing price and a quality product with excellent service and innovation . Our advisers are growing to love Royal London.
And last and by far the most prominent and differentiated of all, Vitality continue their phenomenal rate of growth. They are a branding story that will resonate down the years, and are now suddenly well known to consumers not just for cheeky dachshunds and the fittest of brand ambassadors, but for their world-beating rewards plan that makes protection useful and fun and even of monetary value to those who never claim.
Taken as a whole then, all of this investment and energy has contributed to what now feels to us to be a much more positive time for protection. Everyone I talk to currently reports strong growth.
You know it seems to me that huge regulatory issues like RDR and MMR or PPI simply paralyse a retail market for a few years, but as long as the commercial case for distribution remains intact as it does in protection, if not everywhere else, then retailers eventually get their act together and restart the driving of growth.
LifeSearch never paused, but tightly focused business models like ours are still unusual.
Most of our competitors do other things too, like mortgages, banking or wider financial advice, and it is those businesses who having been stunned by regulation for a few years are now focusing much more on protection and driving much of the growth in the market overall.
I wouldn’t be surprised to see new business growth of 10% plus when the 2017 figures eventually come out.
All this means is LifeSearch will need to be at the top of our game to remain the market leading retailer.
Our opening in Cape Town in September to serve the UK market from there while we investigate expanding into that market is a key part of that, but today’s there is only one big game in town. It’s 'Fintech' of course.
We’re developing new financial technology pretty much flat out, both with Underwrite me, where talking of doing things in real time,
we now provide real time underwriting and pricing to more than 300 advised customers a week and rising fast; many of you said we were mad to back that one, but now you’re all trying to build buy-now!
Just like you said we were in above our heads when we demanded you all copy the late great Bright Grey and publish claim stats back in the noughties, but more of that another time…
Back to today, we are using our uniquely huge experience of recorded customer reactions to build new online trading journeys and structures that really work for protection buyers, becoming as much a digital business as we are an advice one; which is wise if you think about it, because one day most advice and service will be delivered digitally. That means it will take lots more business to keep the same number of jobs, so this surge in the market feels like good news all round to us.
It also seems to me to prove once again the old counter-intuitive mantra that ‘protection is sold and not bought’, for make no mistake, this growth is supply side driven. It’s mortgage intermediaries and IFAs getting out there and talking to customers about their needs; it’s non advised cold callers and their nasty storm of click-bait; it’s PPC and SEO and the still flourishing direct to consumer insurers and of course it’s price comparison websites and banks marketing to their very large customer bases too. But to last, supply side driven growth needs to be met by growth in consumer demand, otherwise it soon peters out.
Consumers will buy when our products are explained to them online, over the phone or in person, but nowhere near enough of them initiate that process themselves to give us any long term confidence in our market’s growth. As a collective, our big challenge must be to change that, so that future growth is demand led too. I have a new suggestion for you insurers as to how we might do that. Ready?
I think we should all become all about claims.
In a digitally enabled world, where all power is flowing inevitably and rightly to the consumer, we should be making the sharp end of what we do, the end that matters most, utterly brilliant.
To really grow, we need to see that.
It is the claim that is our core product, not the policy.
If our thinking, your thinking as insurers, saw the claim as being the thing we have to get right, even more than the sale, our design dynamics would be very different.
We’ve recently seen in the US a disrupter business, Lemonade, lead very effectively on social media with their claims excellence, and over here Hiscox have been doing it successfully in general insurance for years, but in our world, excluding the wonderful 7 families project, which so needs to be developed further; claims are rarely talked about positively.
We’ve laid the groundwork by publishing claim stats, but we need to do more, we should standardise the methodology of their calculation and set aside the subsets of not-paid claims that are caused by wilful non-disclosure and fraud. They are not our fault.
Far beyond that we should turn the established logic on its head. It doesn’t need an actuary to explain that the fewer claims you end up paying the more money an insurer makes. Conversely, as any Lloyds Insurance broker knows, the more claims you pay the more your market grows, the better everyone in it does.
We have to build and sell policies that pay more claims and we need to make far more noise about them than we do now if this short term supply side growth is going to be turned into long term growth capable of getting us to where we should be – protecting all those in the UK who need it.
Our behaviours need to lead consumers to take for granted that in protection at least, their insurance claims will be paid; so that one day, when the person in the street is asked what proportion of life insurance claims are paid, they say ‘all of them surely?’
That change in consumer sentiment is not easily achieved, but with commitment and the harnessing of our digital capabilities to reform all aspects of the process,
from algorithmic product design, underwriting and pricing that cuts out the snags that can catch people out,
to simple, hard to get wrong, application questions,
through focused and personal policy care
to a speedy, sympathetic and totally honest claims process.
We can deliver brilliant outcomes, so that we get that change in sentiment over time and so transform the amount of good that we do.
LifeSearch wants to be able to make the following statement true and then boast about it.
“The insurers we trust to protect you and your family pay out on every honest and fair claim.”
If we could promote that with confidence and vigour, without being turned into fools by poor policy design or claims processes, then on a wider scale, our market can lead the way in insurance generally,
be seen as a genuine force for good and retake its place at the centre of British Financial services, a position we only lost with the demise of the ‘man from the Pru’ in the 70’s .
To grow a 21st century business you really don’t want to make it all about the actuarial science, or the price, you want to make it about giving consumers an experience that turns them into fans of what you do.
Every honest claimant should want to give us 5 stars for service tell the world about how we helped them and not one should be left wanting to talk to BBC Watchdog.
Please let LifeSearch know when we can say this about all of your claimants.