If Dragons’ Den has taught us anything it is that good business is about balancing risk and reward. In the protection market, I often think we get the balance slightly wrong and, in a sector predominantly run by actuaries and underwriters, it is unsurprising we shy away from risk.
Yet some of the great success stories in business start with spectacular gambles. My favourite example is Fred Smith, who founded the company we now know as FedEx in the US. Rising fuel costs had threatened to kill the delivery business and, losing over $1m a month, Smith could not raise any investment. Refusing to admit defeat, he took his last $4,000 to Vegas and gambled his way to having enough funds to keep his planes fuelled for a few more days. The rest is history.
This is not a great template for running an insurance business and nor am I suggesting we are failing in the way that FedEx was. It is also appropriate since we are dealing with, often literally, life and death situations that a position of safety first is taken by providers.
But if we are serious about material growth in the life insurance market, we are going to need to challenge our own beliefs. Almost every event, forum or conference I attend starts with a look at the problems we face. These are consistent: a “gap” between those who have insurance versus those who do not, apathy from prospective clients and indifference or frustration from many of those who we expect to sell our products.
Almost invariably, what follows is a mixture of well-meaning hints and tips on selling cover, plus worthy messages as to why it is so important. Rarely is there a discussion about how we materially change outcomes and genuinely boost sales. When there is, it tends to centre on draconian measures, designed to force our “greens” down the unwilling throats of a reticent public.
I have often heard that Government intervention, assignation of polices to mortgages or workplace compulsion are the silver bullets we need, and far be it from me to dismiss these ideas, whatever my personal scepticism might suggest.
However, surely a better route is to change the things our customers (policyholder and intermediary) are telling us they dislike, either by word or deed. These are changes which, in the digital era, are within our control:
- Making our language clearer and more engaging
- Creating products which are easy to understand (Over-50s life cover is a great example of this)
- Giving a flexible and intuitive buying process, without breaks and uncertainty, but bespoke for each channel.
Crucially, we must move from a position where we create products and processes we think will work, to an open stance where our customers – be they banks, price comparison sites, IFAs or mortgage brokers – tell us what they need before we collaboratively build the solution.
This requires bravery and investment but, embarked upon with the right partners, should not be as risky as betting it all on red.
Phil Jeynes is head of sales and marketing at UnderwriteMe