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Lifesearch suffers £296k loss in 2012

baigrie
Lifesearch chief executive Tom Baigrie

Lifesearch made a pre-tax loss of £296,000 in the 12 months to 31 August, an improvement on the £2.1m loss reported over the same period a year earlier.

Turnover in 2012 reached £16m, up 33.3 per cent on £12m in 2011 and Lifesearch set aside £3.9m for potential clawbacks at 31 August.

Lifesearch says it decided to take a “more cautious view” on commission clawbacks due to the “growth of the business”.

Staff costs, including salaries, social security and pension costs, increased 15.5 per cent from £5.8m in 2011 to £6.7m in 2012.

The firm had 218 employees at 31 August, including 98 sales advisers, up from a total of 191 and 81 advisers a year earlier.

Highclere Financial Services partner Alan Lakey says: “Lifesearch’s cautious approach to clawback could be because it had a higher lapse rate than normal due to the gender directive and the activity it did in the run up to that. People were rebroking a lot of policies.”

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Or alternatively Alan they were taking a hard sell approach under the guise of ‘helping the poor guy’ to buy whether he really wanted it or not. That he might have needed it is beside the point here. Being a social worker isn’t necessarily a profitable pursuit. Taking a Tesco model only works if you don’t get a lot of refunds.

    Yet again it demonstrates the weakness of a commission model. Pay for the advice – not the product.

  2. Sorry, Harry. You’re wrong on two counts.

    Firstly, Lifesearch has a sound moral compass and, like me, doesn’t flog or hard sell anything.

    Secondly, if commission was removed the market would implode and millions more would be under-insured and saddled with incorrect and ineffective policies.

  3. @Alan

    Firstly I never implied that Lifesearch was immoral; misguided perhaps.

    Secondly
    “…if commission was removed the market would implode and millions more would be under-insured and saddled with incorrect and ineffective policies”.

    In which case those who do realise that they need AND want life assurance will be best served as they will seek independent advice and if as you fear, some will have incorrect or ineffective policies, then they will have recourse under the current regulatory regime.

    As I have said so many times it is not our place to worry about the millions who don’t have the wit to realise they should have life cover. Perhaps the government should in that case make it compulsory – like motor insurance (except of course without the commission).

  4. Back in the real world, yes it is a valuable service to bring to the attention of people who haven’t considered the true impact of being uninsured on their lives if and when tragedy strikes, and being remunerated for providing that service is very fair. Compulsory life assurance, people without the wit can be left to suffer the consequences? I don’t like the sound of your world Harry

  5. Oh Harry, Harry, Harry,

    Do you not see that there is social good to selling life insurance? Whether the “sap” who purchases it wants it or not, it’s their family or even themselves who suffer if they don’t buy cover and then something happens to them.

    Sometimes people need help to make the right decisions but aren’t in a position to pay for that help. In fact, sometimes people need help making a decision they didn’t even know they needed to make. THIS is why a commission model for protection sales is completely appropriate for the mass market.

    That said, anyone heard of non-indemnity?

  6. Yes, people don’t form queues to buy products they are not going to benefit from. Even promising 72 virgins wouldn’t work. Life cover has to be sold to reluctant customers for the good of others and commission has to be paid to the seller. If that were not the case the life insurance industry would collapse…

  7. Ah well I guess I’m just taking my own attitude and transferring it. I absolutely loathe being sold to. If anyone tries I just walk away. I couldn’t even spend time in the Istanbul Grand Bazar because I hated the constant sell, sell, sell. I can tell within 5 seconds of picking up the phone if it’s a sales call and I just replace the receiver. I am happy to read and to learn and if I find that there is something I need or ought to have it is I who prefers to make the running and investigate myself and not have someone chasing me and telling me that this is something I ought to have.

    Perhaps that makes me odd and perhaps I shouldn’t bring that across to my working life, but I don’t think I’m going to change now.

    Anyway in the majority of cases clients actually ask me for life assurance although I do admit that I mention it in reports if I find it is lacking or there is a deficit. But I don’t push further than that. I respect the intellectual capacity of my clients and don’t feel the need to twist arms.

  8. Selling is not about twisting arms.

    Anyone who has more than a passing interest in protection matters will affirm that the more people you talk to the more plans you will arrange.

    Many do not even know that such things exist. Many believe them to be inordinately expensive when they are not. Many think the State will provide when we know better.

    Selling is about explaining the need, showing the solution and confirming that it is both necessary and affordable.

    End of sermon.

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