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Space oddity

My work in turning the dream of an industry marketing campaign into reality continues apace and as deadlines look ever more slippery, so I perversely grow more confident that we will see a campaign of the sort we envisage.

Mind you, as we get closer to the wire, so it becomes ever fewer decisions I await and ever more important they each thus become. One day I will write a book about this effort. I know now how to do it right but despite my many failings as a campaigner, it has been a fascinating insight into the workings of an industry and the challenges that lie within positive corporate decision-making.

It is both the right and the wrong time to be asking CEOs to spend money at all. The right time for macro reasons, such as consumer and distributor attitudes, all of which are set fair for protection marketing success, the wrong time for micro reasons such as all budgets being frozen or allocated to share price defence.

I have promised all that I will maintain their confidences as it would be travesty were this effort to be positive turned into a witchhunt of those whose realities mean they cannot be.

The chief structural oddity of the protection industry, it seems to me, is the dominant structural role of its raw material supplier. Imagine the car industry being dominated by the competitive pressures of the rubber or zinc business or the clothes industry by cotton manufacturers.

It is not that in protection the reinsurers dominate the market, it is just that with nine of them, 20-odd serious providers and thousands of distributors, the competitive pressures between the nine have a radically different effect on what protection customers see and get compared with any other sector I can think of.

Of course, unlike our market, reinsurance is a truly global business able to be as fast and flexible in its allocation of new monies to regions and markets as it is possible to be. And as with any such business, that fast flexibility makes for radical insecurity among customers whose models need long-term investment parameters. Pure markets are short-term ones and a business like long- term insurance must necessarily struggle to raise money in them.

Now these are the naive scribblings of one just beginning to understand the actuarial mind’s approach to decision-making. So those of greater experience may find my thoughts risible but in negotiating with these mathematical minds, I have learned that it would be almost impossible for one of them to run a retail business say, where one invests in customers and those who face them in the knowledge that whatever returns they produce will always make your forecasts look silly but you just cannot tell if that is silly-way-too-low or silly-way-too-high.

Human behaviour is not possible to map mathematically except in matters of medicine perhaps, where matters lie mostly beyond the capricious human psyche. Is there an exception to the rule? Is there a distribution business run by an actuary? If there is, its leader will be a demonstration of one of two perfect oxymorons – they will either be a radical actuary or a conservative retail entrepreneur. Find me that person!

Tom Baigrie is managing director of LifeSearch


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