The emphasis that product providers place on new business is damaging the industry and is detrimental to consumers, according to industry experts.
Over 30 senior executives from UK life companies and other financial services met at a Watson Wyatt debating forum recently to discuss the proposition, “This house believes that the focus on new business sales is damaging to our industry and hence is detrimental to consumers”.
Fifty three per cent of the audience were in favour of the motion before the debate and this rose to 59 per cent in favour after the discussion.
Ninety-one per cent thought that new consumers were considered more important and given a higher priority than existing customers while the remaining 9 per cent believed existing and new customers were treated equally.
None of the attendees thought that existing customers were considered to be more important than new customers.
When asked for their views on treating customers fairly, only 30 per cent said it would be a positive contribution to the industry and 22 per cent thought it would have an adverse impact.
Watson Wyatt senior strategy consultant Mike Williams says: “It is of considerable concern that so many in the industry remain sceptical about the TCF initiative. We held a debating forum in April 2005 where 46 per cent of the audience believed that TCF would help to restore faith in the financial services industry. Experience over the intervening 18 months has, if anything, dampened this already limited enthusiasm.”