View more on these topics

Richard Verdin: How protection experts got it wrong


Five years ago no one imagined the combination of events which have led to the protection market being in the state it is now.

The surveys of experts at the time showed many were optimistic that customer engagemnet and new business volumes would both improve. I am certain that if back then you had added up all the business plans approved by the UK life company chief executives then you could have reasoned the market was going to grow by 50 per cent or more in volume and an even greater amount by value between then and now.

I remember the conversations back then were along the lines of: RDR boosting advisers’ focus on protection sales, and banks being clear winners from the change and homing in on protection. Some thought a resurgence in property transactions would produce a like-for-like increase in protection sales. Of course, five years ago not many saw that the payment protection insurance debacle would land quite as heavily as it did. Absolutely no one foresaw Test-Achats and the gender pricing ban, and as for the removal of I-E, whilst a no brainier, most would not have bet on it getting to the top of the Treasury’s ‘to do list.

However it is not just the protection industry which suffers from getting the future wrong. Research undertaken by Philip Tetlock, professor of psychology and management at the University of Pennsylvania, illustrates that experts, when making predictions, fare only slightly better than chance and non-experts. And yet, we are significantly more respectful of, and swayed by, the opinions of experts. This is largely because with expertise comes confidence, a willingness to assert and persuade and the ability to hand pick facts to support what are really only guesses. 

All of which drives another nail into the coffin around the value of surveys (and perhaps expertise), however it should also inform us about the fallibility of the business forecasts and projections we are all asked to develop and which others set so much store by. 

I cannot see into the future, but I do have an assertion, and I have some hand-picked facts which help support my view. The hand-picked facts are these :

  • The number of advising staff in financial adviser firms has reduced by 16 per cent in the last five years (according to Apfa);
  • There has been a 75 per cent to 100 per cent increase in the number of hours it takes to advise on mortgages, thus reducing the time available to advise on peripheral protection needs
  • It is these facts which cause the correlating decline in new protection sales by value, which over the same period are down 23 per cent (according to the ABI).

My conclusion and assertion is this; the only way to substantially grow the protection market is to increase the number of selling/advising hours spent on protection.

Whilst my conclusion may seem obvious, there comes a question from this that naturally follows: How many of those leading protection businesses are currently attempting to substantially grow the number of selling/advising hours spent on protection?

Richard Verdin is chief marketing officer, UK and Ireland at RGA



Banks warn Osborne on HMRC tax grab powers

Banks have warned Chancellor George Osborne that HM Revenue & Customs is not competent enough to be trusted with the power to seize unpaid tax directly from people’s bank accounts. British Bankers’ Association chief executive Anthony Browne has written to the Chancellor saying the plans are not proportionate and risk falling foul of human rights […]


US private equity firms close in on Kensington deal

Two US private equity firms are close to agreeing a deal to buy Investec’s UK intermediary mortgage arm Kensington Mortgages. Sky News reports Blackstone and TPG could complete a deal as early as this week for the specialist lender, which was acquired by Investec for £283m in May 2007. The size of the deal is not yet […]


Govt to toughen up on offshore tax evasion

The Government has set out plans to make failure to declare offshore tax arrangements a criminal offence. In a consultation, published today, the Government proposes to make it a “strict liability offence” to conceal funds offshore for illegitimate tax purposes. Under the proposals, a strict liability offence is a criminal offence where it is not […]


Guide: what you need to consider for your auto-enrolment project

In this guide, Johnson Fleming reveals what items you need to understand to gauge the impact of auto-enrolment on your business. The guide focuses on: the impact that your auto-enrolment scheme will have on you; assessing your workforce; understanding your staging date; reviewing your current provision; and modelling contribution levels and costs.


News and expert analysis straight to your inbox

Sign up


There are 10 comments at the moment, we would love to hear your opinion too.

  1. We constantly hear how technology can increase sales by reducing time-consuming activities or by enabling faster analysis.

    At CIExpert we have created such a device for enhancing both quality and quantity.

    Let’s not forget, it’s the time spent with a client – whether face to face or remote – that determines how readily the concept of protection comes across.

  2. Of course there is the fact that underwriters are declining cases at a great rate of knots and that every decline creates more work for those advisers still in this market.
    Then of course there is the fact that most people don’t believe they will ever have an accident, illness or even die. Education, Education and Education as one lying Prime Minister once said.

  3. And the same Industry people, in the same jobs, getting paid for doing the same things. Unfortunately this story is not new and comes around with frightening regularity. Perhaps the Industry is not driving forward because the wrong people continue in their senior roles: no innovation, no change in the model and no real changes in the faces. This is not directed at any one individual but rather the whole. Just saying.

  4. good day for golf 21st August 2014 at 10:00 am

    There is always a need for advice in this area.
    However there should also be a facility to compare on line. Those I see comparing on line STILL receive hundreds of pounds if not thousands for an application.
    That is off putting to the general public.
    I don’t see why life companies don’t get together and offer d2c no commission product.
    I understand they will upset writers of business but times have changed- there are no door knockers out there anymore and the business brought in is tiny in comparison to the past.
    Life companies are not really serious about providing the product only they can provide- frustrating.

  5. good day for golf | 21 August 2014 10:00 am

    And why don’t you get out of your bed in the morning and work for free?
    Life cover can be purchased online without any need for an adviser so why aren’t they buying?

    There is already many ways a client can purchase protection cover at virtually no commission or reduced commission so what are you talking about. I know this obviously goes way over your head but even online systems have to be paid for.
    They used to say; protection isn’t bought – its sold. Maybe there lies the answer?

  6. good day for golf 21st August 2014 at 3:39 pm

    Dear Jinker

    I have tried to look for cover at reduced rates but not been able to find it.

    I know what I want and don’t feel a platform provider should receive hundreds of pounds for sending me a pdf app!

    It seems a fair comment and does not merit your angry response.

    If I want to paint my house I go to DIY, I repair my car I order parts on line etc…

    Life companies are acting like luddites, unionised style labour. D2c is a legitimate route which should be promoted through the internet.
    Many people just want a policy- not have to sit down for 3 hours asking hundred and one dif questions.
    Bad life policy is better than none at all.
    Written in trust is very easy to do.
    Don’t worry about those who can’t find plumber in the directory- those type wouldn’t have the nowse to figure it out themselves- leave them to find some way round it.
    As has been mentioned here previously the life premiums drop significantly if the commission is removed.


  7. Its the economy stupid! It got Bill Clinton elected when things were going well but when wages do not keep place with inflation protection insurance is regarded as a non essential expenditure. Having said that people would rather spend money on the latest electrical gadget than spend on protection.

    Don’t forget of course the myth of the unprotected widow. They cry over your grave and marry your best mate 6 months later. That’s life!

  8. good day for golf | 21 August 2014 3:39 pm

    Angry comment? Don’t think so as all I did was point out you don’t get out of bed for free.

    Also, there is a wide variation of premiums available. Don’t try and be smart because you only look a fool. All you have to do is run this through a comparison website and compare it with what is available to advisers through Assureweb and The Exchange. You’ll see a difference.

    And, don’t kid yourself forging commission drastically reduces the premium. It doesn’t.
    44 Male N/S £150k Level Term – 10 Years – £13.36 no Commission – £15.90 with 50% (£170.00) Commission
    No body really needs advice about taking out the cheapest cover they can find to protect their assets and loved ones So why aren’t they?

    Of course you could always pay me a fee instead (£295.00) to find the cheapest alternative for you and who wouldn’t hike up the cost following underwriting because that’s what usually happens. Cheap = Rigorous Underwriting. And finally, get one of those questions wrong and hope for the best if you ever have to make a claim in the future.

  9. good day for golf 22nd August 2014 at 10:39 am

    Thanks Jinker I may take you up on that offer- the life cover is in place but I would like to rebroke it as it is st level term with crit. Was done in a rush to replace employee benefits.

    F N/s 15 yr term $525,000 guaranteed cover with 250kusd rider crit
    UAE resident 43 n/b n/s very good health with wop
    death benefit facility 5% indexation can be declined by client
    paying with hsbc $196.60 p/mth

    Agree with you this stuff is sold not bought
    I sold lots of it and loved doing it- miss it really – vastly under appreciated sector

  10. good day for golf | 22 August 2014 10:39 am

    UK clients only I’m afraid.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm