Many years ago, some time after the launch of Headlinemoney, the financial press and PR hub, I was contacted by its then legendary editor and publisher Roger Anderson.
Roger informed me I had been nominated for an award and wondered whether I could provide a few words – based on a question and answer format – for Headlinemoney’s brochure, handed out to those attending the annual prize-giving dinner.
One of the questions stood out: what basic, simple message would I like to give the industry’s great and good, gathered to celebrate the achievements of journalists and PRs that year?
Bear in mind this was the period shortly after the end of an almost decade-long personal pensions review process, when more than one million people received compensation for being transferred out of their occupational schemes.
Millions more were just then in the process of having their mortgage endowments assessed, to see whether they had been missold unsuitable products.
Stories were rife of other, relatively more minor misselling scandals, not to mention grotesque charging structures, incredible product opacity and appalling persistency rates – no change there, then.
So my simple message to the life insurance industry that year was: apologise to the many millions of people you have done harm to. To no-one’s surprise, least of all my own, no mea culpa has ever been issued from the lips of the industry’s finest, then or since.
That said, fast forward a dozen years or so and I found myself choking on my muesli and banana breakfast the other week, as I read in Money Marketing of a speech by Association of British Insurers chair and Axa UK group chief executive Paul Evans.
Evans told a gathering at the recent ABI retirement conference how upset he was by the fact the insurance industry is less trusted than banks and estate agents: “That our sector has lower consumer trust than the banks with all their troubles, is embarrassing. That we are trusted less than estate agents is frankly humiliating.”
In fairness to his audience, which almost certainly included many financial scribes, Evans politely glossed over the fact that virtually all the UK surveys about unpopular professions always place journalists towards the bottom, ranking them just above politicians.
Still, his underlying message was clear: the insurance industry is not trusted and must do something to dig itself out of this abyss.
So far, so good. My problem, however, is not with Evans’ understanding of the relative position of his profession in the occupational popularity stakes, but his analysis of what caused it and the remedies he things should be bought to bear to rectify the issue.
Evans told delegates: “We will be pushed aside if we do not rapidly re-earn the trust lost over past decades. Decades during which the business model was different because of adviser commission, the legacy of which is an open sore that continues to undermine trust in what is now a completely different proposition.”
My concern lies with Evans’ use of the word “commission” in the way he does, almost as if it were a disembodied object that somehow miraculously appeared one morning when no-one was watching and took over the industry.
In “Evanspeak”, commission appears to have no connection with human agency, least of all people working in insurance companies, including his own, who create products and then work out the most effective ways of selling them profitably.
Commissions, as well as weird charging structures which penalise the vast majority of consumers forced to surrender early or make their plans paid-up, are not an accident. They are the result of conscious decisions by colleagues Evans has spent the last 15 years or so working alongside after leaving PwC, including at Axa.
A similar feeling comes over me when I read Evans’ offering with regard to customers trapped in high-charging legacy pensions products left over from the 1980s and 1990s.
A few weeks ago, Money Marketing wrote about a blog by ABI head of savings, retirement and social care Yvonne Braun. She blamed the Department for Work and Pensions for failing to give providers the power to bulk transfer occupational scheme members to new and better plans.
This, she said, was essential because otherwise individual consent was necessary and obtaining a response from individual members would be nigh on impossible.
No evidence was provided of any attempt by providers to promote such a switch, of industry-wide moves to at least move members onto “a modern operating platform that can be operated at a much lower cost than a legacy platform,” or to lower or waive its own charges.
Evans’ speech continues with the same argument: it is not the ABI’s fault we still have a continuing scandal of high charges and penalties for switching out of expensive plans, it is all to do with the Government.
This convenient cop-out over charges contains the same echoes as Evans’ reference to commissions: an intangible, ethereal entity is making life difficult for the life companies and their customers. Sadly, insurers have no power to do anything about it, he tells us.
Back in the early “Noughties”, I asked the insurance industry to apologise to consumers for its actions. Thanks to Paul Evans I now realise I was mistaken: it is never his members’ responsibility if something goes wrong: just blame everyone else.
Nic Cicutti can be contacted at firstname.lastname@example.org