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Royal London chief attacks protection industry ahead of D2C launch

Royal London chief executive Phil Loney believes banks and rival providers are ripping off life assurance customers and plans to address the problem head-on when the insurer launches a simplified protection proposition later this year.

On Saturday the mutual will launch its first TV advertising campaign for over 10 years ahead of a drive into the direct-to-consumer market.

Loney says Royal London is looking to shake-up the protection market and claims existing providers are offering “appalling” value for money.

He says: “We are looking at developing very simple products in markets that exist at the moment but are giving people lousy value.

“The primary focus in D2C is the over 50s cash plan market. The value for money for customers and the fairness in that market is appalling.

“At the moment the cost of cover is very high because the providers are making very big margins. Secondly, you can go on contributing into some of these products for 40 years and over contribute way beyond the benefit you are going to get out. That doesn’t seem fair.

“Likewise you can contribute for 30 years but as soon as you stop making payments you lose everything. That doesn’t seem fair either.

“We will be entering with a product that is designed to address those issues. We will be operating at much lower margins than the shareholder-owned companies do and we will be offering a much better customer proposition.”

Loney insists Royal London’s D2C push will not dilute the provider’s adviser proposition.

“If you could see my business plans you would understand why advisers are so important to us,” he says.

“No matter how far into the future you go our adviser business will always be much bigger than our D2C business.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Can I be Tonto to your Loney Ranger?

    You are so right! It is very refreshing to have an insider recognise this; many advisers have been saying this for years.

    I look forward to seeing your proposition – but two pleas – don’t make it simple at the cost of administration. We suffer far too much from appalling service as it is.

    One major (and expensive) provider feels that it is acceptable to administer all their life business from 5,500 miles away and offer discounted gym membership as a bribe.

    The second concerns the comparison engines advisers use. Too many life offices post rates which bear no relationship to what is finally offered. The initially quoted rates often apply to Olympic standard fitness and any excuse to hike premiums is used when it comes to the wire. An eighth portion birthday, an R in the month or a full moon.

  2. www.getguidance.com 2nd May 2014 at 1:35 pm

    Famous last words these (“No matter how far into the future you go our adviser business will always be much bigger than our D2C business.”) will prove to be.

    Kinda reminds me of how Bill Gates can’t see how we’ll need more than 640k memory!

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