I suppose it makes sense at this time to take the temperature of the life and health protection market.
On a personal level, last year was horrendous year as I lost close friends and saw others struck down with serious illness. This sort of experience makes you realise the potential value of what we do, even if that often does not go far enough. On an industry level, I am far from satisfied with what has happened in the protection industry.
It was a year of struggle for most companies, as one would expect in the aftermath of a severe depression which has chewed away at the confidence of the City and the British public. The uncertainty over a double dip just adds to the feeling of insecurity but isn’t a feeling of insecurity a prerequisite for buying risk products? Not looking at production figures in 2010.
Having said that, a visit to a City or Docklands wine bar at 6pm most nights of the week does not suggest a country or financial services industry on its knees but possibly there is an element of drowning sorrows going on.
I am often asked if I think consolidation of the protection industry is a desirable thing. My feeling is one of ambivalence. I want to see a strong sector with diverse and innovative propositions and if the consolidation we are seeing is more to do with capital efficiency than customer need, I cannot say I am whole-heartedly in favour.
Nevertheless, no sensible businessperson would want the industry to operate inefficiently if this could be avoided. I hope by the same token that brave new propositions still come to market. Both Pru Protect and Fortis have brought much needed new thinking and a sense of energy to the market since they entered in the last few years and I applaud that.
Similarly, a reinsurance sector of eight or more companies serving a dwindling number of providers makes no economic sense and will probably lead to price competition that is so intense it leaves no margin for reinsurers to provide the sort of services that providers have valued over time.
Commoditisation allied to a focus on operational efficiency is all well and good but it is not the recipe for producing a sector which is continually aiming to support and help people either in distress or who are planning to avoid the consequences of distress.
I think the public deserve a better industry than the one it has at present. It could be a year of unprecedented opportunity, given the intention of the Government to reform the welfare state. It would be a pity if, at the very time that Westminster may choose to hand over some new opportunities to us, it finds an industry too preoccupied with internal re-engineering to spot a whole load of risks and concerns that we can provide solutions to.
Peter Le Beau is managing director of Le Beau Visage