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The protection industry needs more risk takers and innovators

Society normally treats risk takers and innovators as either prophets or pariahs; unfortunately our industry all too often only sees them as pariahs.
The fear of the new is often so strong that it chokes individuals, companies and even markets, leading to flat lined market growth and an unhealthy inward focus on competing for existing markets and not working to grow the market as a whole.
The CPIEC campaign last year brought these issues sharply into focus, with the industry not being able to find a way to combine to promote itself, and so it is great to see UNUM unilaterally deciding to run a consumer facing advertising program to promote the need for protection. This is not the first time that UNUM have put their head above the parapet – their Elixia 123 product was launched to critical acclaim but bombed as the innovation was too revolutionary for the distributors. Eight years later we now have a market where tiered benefit levels exist within many of our CI products. Prophet or Pariah?
We need to see more of this risk taking, market making behaviour from all parties in this industry of ours if we are to find ways to excite and delight new customers and make our markets grow. A good example would be the growth in underwritten annuities where markets have re-invented themselves and now customers are seeing better value for their hard earned pension savings.
Since CPIEC we have had a change of government and our industry now looks to the ABI to provide leadership for growing our industry’s protection brand. Surely there has never been a better time for us to put funds in place to allow us to work with Government to build awareness of the need to insure, and surely there has never been a greater need to invest in developing tomorrow’s confident consumers.
The changes that will come from NEST, RDR and the FSA’s Consumer Education policy are all opportunities for us to find innovative ways of reaching new customers, rather than seeking to protect our purely perceived, complex, and shrinking market.
We are after all a risk business: isn’t it time we started acting like one?  


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Cracking comment – it was a shame that CPIEC didn’t get to a conclusion and all credit to Tom Baigrie for really giving it a push – more marketing will give us all more customers at the end of the day

  2. The FSA don’t like innovation.

    There is no chance of the UK remaining a leader in world finance whilst their write runs.

  3. I second the comment about Tom’s efforts. We all need someone in government to be reading this, and to realise that they are the biggest beneficiaries when people save and protect themselves! There has got to be a business case for this, if they are not just thinking about the current funding cycle…

    Although, I have heard that CFEB has a few bob…

  4. Why would a risk taker WANT to be in financial services? Even the b….y industry and the regulators are risk averse most of the time, or busy giving us all a bad name.

    People are buying less of our product and not doing themselves justice. And no-one knows why? Come on…..

  5. Agree with David’s sentiment about growing the market not fighting for a slice of the same cake but why are we so lily-livered as an industry? Why constantly talk about loooking for backing from the govt or support from the FSA? The ABI could fund its own awareness campaign and companies can launch their own new products quite successfully even without a big fanfare. Enhanced Annuities already have a good market share and the sales failure of products like Elixia 123 was arguably down to the company and the sales support rather than the product itself. I’d say “yes” to innovation but “no” to thinking the coalition govt will want to get involved with helping or supporting insurers, whether its a win/win with State benefit outlay or not.

  6. Talking of politicians and insurance, see the quote below from Winston Churchill…
    “If I had my way, I would write the word “insure” upon the door of every cottage and upon the blotting book of every public man, because I am convinced, for sacrifices so small, families and estates can be protected against catastrophes which would otherwise smash them up forever. It is the duty to arrest the ghastly waste, not merely of human happiness, but national health and strength, which follows when, through the death of the breadwinner, the frail boat in which the family are embarked, founders and the women and children and the estates are left to struggle in the dark waters of a friendless world.”

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