LifeSearch 25th Anniversary Awards - Toms Talk

25 years!

That’ll sound a very long time to be in the protection business to most of you, but I’m afraid I sold my first term-life policy 42 years ago, lord help me!
I’m proud that my second protection sale was something called permanent health insurance, which I always thought should be called disability insurance, but which you know as income protection.  
If only I and all of us had kept the sales of IP equal to those of term!  In between though, I sold unit-linked savings plans whose life insurance element got them tax relief, believe it or not.

So I go back to a time when the word protection was barely ever used, in our context at least!  Because life insurance meant savings plans, then investment bonds and then endowments, 
all of which our market then steadily evolved the wrong way, to become just very expensive ways of saving, and all of which were effectively put out of business by government and then regulator, because they became not good enough for consumers.  A self-inflicted great shame.

25 years ago when Arthur, my business partner, and I split our business into 2 parts: pure protection and financial planning, 
our ethics had put us well ahead of that regulatory curve. 

I remember a seminal moment around that time, at a then super-prestigious City and Westminster conference: a clearing bank sales director telling us that he’d come straight from their national sales event at the NEC in Birmingham and a hall full of 100’s or was it 1000’s of bank branch managers shouting and cheering at their plan to sell more endowments than the rest of the country put together.   It might have been watching that room of very senior financial services folk taking that clown very seriously, that made me the consumer campaigning pain in the neck you all know and tolerate. But relax, this year I’m not going to tell you what to do. I did that last year and many of you insurers have assured me that you are mystery shopping and challenging poor retail behaviours privately 
and, as a collective, weeding out rogue distributors too.  I hope so, but in the end it’ll not be up to you and me.  The Consumer Duty and how the FCA interpret it will decide what works and doesn’t in the future.  So no more of that today.
 
Let me rather talk of just how far our market has come in LifeSearch’s 25 years, from those days when selling endowments and bonds was mainstream, to now, when none of us sell any of those at all and our market is a healthy, stand alone, and vibrant part of UK financial services, in a way it is simply not in Europe say. 

It’s necessarily a small part, because people rightly spend far less on the catastrophe insurance we sell than they do on wealth accumulation, but we are nonetheless a substantial stand-alone specialist field, and no-one argues that what we do is not the key cornerstone of any financial plan.

Back 25 years ago, LifeSearch was the first firm to declare itself a protection specialist. Our competitor was Direct Life and Pensions, so not quite specialist, but in practice very nearly. 
We were both enabled by new technology: What is now Iress gave us desktop price comparison for term life, so we could give customers prices over the phone swiftly, without thumbing rate-books and calculators, and thus telephone advice in our case and tele-sales in theirs was born.

Has there been a longer tech relationship in our market than Iress and LifeSearch’s 25 years? Loyalty really does offer the very best long-term rewards.

Mind you, we all very nearly got wiped out a decade later!  

The Retail Distribution Review took 6 years either side of the global financial crisis of 2008, both of which threw into question every financial services business model.  But throughout the 6 year review and the GFC, a small group of us were distracting the regulator’s focus on investment and pension mis-selling, with demands that life insurance should not be seen as what it had been, part of the investment world, but as it had to become, part of the GI world. 

It was a very close run thing, we very nearly all became collateral damage in the FSA’s drive to abolish commission in financial services. 

Kevin Carr and I remember the moment in a Canary Wharf meeting when we saw the penny drop for the FSA decision makers, that in protection, abolishing commission meant abolishing intermediation. Others will have lobbied them too, but I always fancied that was the moment the tide turned.

For commission, indemnity or repeating, is both the root of good and evil. Like money itself. Indemnity commission enables small businesses to set up using their product suppliers, the insurers, as bankers, and their customers as their credit managers. That means our market is full of smaller players doing well. LifeSearch was a pioneer but is now surrounded by 100’s of similarly excellent businesses, protecting families, increasing access to protection and striving to improve what our market does.  

The relatively few who behave badly could and should and increasingly are being weeded out by insurers, or their own investors, focusing ever more on quality.  It is a focus on quality of customer outcomes through the distribution chain, from reassurer to insurer to retailing intermediary, that nullifies the potential risks of indemnity commission.

The best of those many protection specialist businesses (IMHO) join the Protection Distributors Group, whose sole aim is to improve what our market does for customers. Does any other market have a practitioner group that just seeks to do only that?

The PDG are one of many signs that our market is falling in love with the good that it can do, not just the money it can make.  As I might have told you before, the Ancient Greeks had many words for the different types of love in the world, and the one that most closely aligns with that warm feeling you get when you do something good for another person, is Agape. The love of the good you can do. 

All around our market, and of course with exceptions that prove the rule, I see more and more businesses being led by a love of the good you can do. Of course our work is one where that should be a natural thing – it’s too long winded to be a slogan, but we all share one purpose: to protect people against the financial consequences of physical or mental catastrophe. 
Our job is to convince people to do the right thing by themselves and their families, in case death or disability cause them financial catastrophe. 
And then when it does, to ensure that they get the money and help they need to survive it.

Our conferences and press are full of efforts to call out failures and improve all parts of that process, from the sales behaviours, through underwriting and policy management and then claims handling and payment. We all talk about, and listen all the time to, efforts to improve what we do, in a way you simply can’t see elsewhere in financial services, where processes are naturally simpler and what makes the difference is not so much service and ethics as investment strategy and legal and financial structuring.

Protection is a complex part of the General Insurance world, which is why so few in that world engage in it. But the fact that explaining and enabling something is not dead-simple does not, even in a digital world, mean it should not be done. I’m not sure our products can all be made able to be bought on a click. 

Thought I do wish an insurer would try to deliver a product where the removal of complexities is simply paid for by a higher premium.  Were that to work, it would radically change our market. 
Higher premiums for simplified application processes would be value for money. Add in a guaranteed pay-out, barring fraud of course, and I think you’d pass the Consumer Duty test; But that’s for another time.

Today as LifeSearch celebrates 25 years, I look back at how I have seen our specialist retail market grow from a handful of start-ups to one employing many 1000’s of people, and how I have seen our IP, Term and CIC manufacturing market grow from being the Cinderella, to the two horrible sisters, Miss Endowment and Miss Insurance Bond (actually 3 horrible sisters if you include Miss PPI).
 
I look at this room and see that Cinderella really has come to the ball! 

For we are a fully fledged, and what’s more, nowadays a nearly female dominated market, full of diversity and good intent.  Collectively, we strive to care for the vulnerable, seek to employ and serve the disabled and neuro-divergent, and more and more we seem to demonstrate Agape, and indeed the values LifeSearch selected for itself long ago: 
For you are Excellent, you do Care, and you are increasingly Tolerant, Open and Honest, though of course, Protection, there is a way to go!

So 25 years in, I feel like our market is coming of age, my hope is that the FCA and the Consumer Duty will clean out the 
remaining foul practice, and then we will be able to drive a new protection algorithm, where universally better behaviour earns consumer trust and allows us all to protect far more Britons against the risks they daily fall foul of.

You should all see protection as a noble calling, a business that does good, and at a personal level you should love that about you and what you do, and try to make it more true every day.

Thank you.