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Different strokes

Innovation is needed to keep the protection industry afloat

One of the few downsides to being co-editor of the Protection Review is that a lot of people expect me to provide the panacea for all the ills of the protection industry. Unfortunately, I am much better at diagnosis than cure. Such are the problems that beset us in protection that at the recent Protection Review dinner , it was tempting to cry: “Is there a doctor in the house?”

Of course, management consultants are supposed to have the cure for the sort of slump in sales that the protection industry has experienced and that is innovation.

Innovation is the most used but least realised cliche in our industry, partly because, as one of my colleagues says: “It might be fun but it is not easy,”

Judging by the track record of our little part of the life and pension industry, it does not look as if it is either fun or easy. One reason is the opprobrium that waits in store for anyone who deigns to do anything different.

Virgin’s Big V plan was castigated because it did not offer enough cover and was too stark and simple. On the other hand, Pru’s new plan launched in concert with South African firm Discovery is derided for being too complicated.

We obviously want our innovation just right and, sorry to say, innovation does not usually come like that. I help to run a course twice a year that teaches overseas actuaries about innovation (and you think your job is hard). We begin by getting them to broaden their thinking and to welcome the fresh idea, even if at first glance it seems wacky or unsuitable. It is very exciting to see them grasp the nettle of innovation for the first time and to begin to discover how innovation arises.

It comes because people are brave enough to ignore criticism and to follow a vision. Only by pushing or changing the boundaries can progress be made. Innovation does not come in nicely tailored leaps at 3,500 a day from management consultants. It arises because people dare to try something different.

As it happens, I am not convinced that either plan is the solution to the mass market’s major problem of selling more cover but I will stoutly defend their right to seek out new ground in the push to sell more product.

While I think innovation is part of the answer, I am also conscious that some of the main messages we got in our trends survey also make a lot of sense. They were to simplify, particularly income protection, and advertise.

Who in the current protection industry is bringing the key messages about the vital job our products do to the marketplace? If concepts can be explained in simple terms, it must make the public more aware of their value to them.

Is it any wonder that people struggle to appreciate the value of what we do when we hardly ever tell them how many families have their futures changed or shored up by our industry every year? It is time to get on to the front foot and put these messages across to the world at large.

While I am attempting to save the future of our industry, why do we insist on commoditising everything we do? Focusing so much on price often devalues what we provide. One company reprices its product virtually every month, presumably to stay top of the search engines.

Let us think from the perspective of a claimant for a change. If someone has a critical illness, suffers a severe disability or if a family is bereaved suddenly, money is the answer to only part of their problem. They need help in planning their future lives and in coping with the everyday business of life. This year’s Protection Review illustrated a much greater desire on the behalf of the industry to look at propositions as opposed to merely providing cash. I believe this is an enlightened approach that will help us to improve the image of an industry that radically needs a facelift.

But it will not get one while it focuses solely on being cheap, seizes on any new ideas with a cynicism that defies belief and keeps on hiding its very considerable light under a bushel.

We do some great things for a large number of very grateful people. Let us not be frightened to share the news.

Peter le Beat is co-editor of the Protection Review

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