Peter Le Beau gives Fiona Murphy the definitive interview about his retirement plans, a career spanning five decades in the protection industry and his views on the evolution of financial services.
Peter Le Beau is a man who really needs no introduction.- he has been the champion of the protection market over the past five decades and is retiring at the end of the year.
His career has been varied with shifts at Commercial Union and Swiss Re before moving onto self-employment through Le Beau Visage, Income Protection Task Force (IPTF), The-Net-Work and Protection Review, as well as serving as non-executive director for companies including FINEOS, Red Arc, Health Claims Bureau and The Exeter.
I asked him, why is he retiring now? He says he wants to pass the baton on and focus on other priorities.
"You realise that you're much older than most of the people in the industry and while you've got some wisdom, you're also aware that your ideas aren't as modern and relevant as some of the new people coming in - you might be getting in the way a bit.
"You have less energy although I've stayed very active. That's not been a major issue but I've been working for nearly 50 years and I want to spend more time with my wife; she's been very patient and supportive.
"And I've got grandsons that I want to see grow up and I just want to spend less time working than I have. I've worked very hard for a very long time.
"I think we've had some big breakthroughs in the industry and other people are in a good position to build on them."
The benefit of distance
However in his retirement, he's continuing to run The-Net-Work, a 16 year old forum for discussing protection issues, because he wants to stay in touch with the industry.
Will it change its remit or meet as frequently as it has in the past?
"We may even increase it a little bit. I don't think there's enough informality in our industry now and it's been a really interesting thing to be involved in.
"With the benefit of distance, I might be able to make it even more interesting. You can stand back and say what do we really need to look at? Can we look at that in a different way?"
He is also continuing as chairman of LegaCare, a charity that provides free legal support to people with life-threatening and terminal illnesses, and hopes the charity will get wider roll-out.
"At the end of the day, we help people with material things. We may give them an amount of money. But we don't necessarily help them prepare all the legal bits and pieces before they die."
Something that COVER readers may not know is that Peter is chairman of a Magistrates Court.
However, he surprises me by telling me that he has recently accepted a position on the monitoring board of a prison, dealing with prisoner conditions and their concerns and issues.
"The prison I'm going to be involved with is a prison for lifers, although this sounds like a contradiction, coming out after a long sentence. Obviously they've done something pretty serious to be in there for life, but how do they adapt?
"I want to try and make sure the prison is as effective as it can be in helping people to rehabilitate into society and to adjust to a different way of life when they come out."
Peter describes meeting a 52 year old man who had little knowledge of the modern world after being inside for 27 years.
I note that tying all of Le Beau's interests together, he seems driven by caring about people, where did that impulse come from?
Insurers and influence
Peter takes me back to a memory from the beginning of his insurance career in the late 60s.
He says he fell into insurance "without much direction", first in admin, which he hated, then in underwriting, which captured him.
He placed large cases for Commercial Union - the insurer would hold celebratory drinks which led to a revelatory conversation with a colleague.
"He said: 'what you need to do is go along and pay cheques to people who've been bereaved. Then you realise quite how important insurance is.' It struck me: I'd never thought about that aspect of it."
After that chance discussion, I ask who the biggest influence on his career has been.
He admits there has not been one single person- it's been a composite of lots of different people along the way.
The late Paul Bradshaw, Skandia founder, chairman of Nucleus and chairman the Protection Review Awards, was someone he enormously respected - a "great mentor and someone to chat things over with and [give you a] challenge."
He also references Marius Barnard, the first heart transplant surgeon who became the architect of critical illness cover, as an important figure "who lived and breathed the value of protection insurance", although this was not someone he knew well.
In 1987 Peter moved to Swiss Re, becoming head of underwriting and then head of marketing, which seem very contradictory roles for one person.
"I got more involved in marketing and it was very hard, you shouldn't have a head of underwriting interested in marketing. It's a conflict of interests really.
"To be honest I got the impression that in terms of career progression, underwriting was a bit of a cul-de-sac because I couldn't see it developing as interestingly. That may be different now with the emphasis on data, but certainly in the '80s that was the case."
He worked through the acquisition of Swiss Re's competitor MNG in 1996 and was with Swiss Re until 2001.
"Let me emphasise, Swiss Re were a fantastic company to work for. I loved them to bits. They did a huge amount for me and I was very grateful to work there."
In terms of his impact at Swiss Re, he was staggered that insurers did not carry out market researcj and he developed a model adopted by others. That legacy continues today in the annual Swiss Re Term and Health Watch reports.
He also helped Swiss Re develop a more customer friendly approach- it may seem amazing to newer readers that the Financial Services Act with its mantra customer fairness was passed in 1987.
'I don't want to work in big companies all my life'
However, Peter got to the stage where he thought: "I don't really want to work in big companies all my life. I wanted to run my own business and focus on making the protection industry more consumer-friendly."
He transitioned from corporate life to consultancy, an early adopter of a portfolio career, with Swiss Re as his first client. He remembers it as being a huge culture shock at first.
"I set myself a scorecard- I wanted to try and have more fun than I'd latterly been having in corporate life and I wanted to do things that would advance the protection industry.
"I set up The-Net-Work after I left Swiss Re. I was sitting at Gatwick Airport fog-bound and I realised I didn't have to hand the information I normally would have.
"What do people do? I can't nip into the guy's office next door to have a chat about the latest regulation paper or have you heard that so and so is leaving. I decided to create something that created a strategic discussion for people in my situation."
A few years later, he launched the Protection Review in 2005 with Andy Couchman.
"We felt a market overview wasn't being produced and there was an opportunity to do it.
"Originally I thought we'd produce a book but we decided to be more ambitious. The [annual conference and awards] is a real market fixture now.
"I'm very proud of the fact that the industry gets together and has a serious discussion about issues at the conference."
IPTF's catalysts for growth
In 2001, former Zurich man Clive Waller bought Peter lunch at The Savoy and challenged him with the view: "Individual IP isn't punching its weight, we ought to publicise the value of the product more."
The Income Protection Task Force (IPTF) was born with Waller initially as co-chair, starting life with research into reinventing income protection and evolving into a trade association.
Here, Le Beau praises his executive team and the relationships that led to the creation of its flagship initiative, Seven Families.
"Karin Lloyd said to me, it's frustrating that IP sales are flat-lining, if only we could show people the value of it. It was like a lightbulb came on in our heads and Seven Families was born."
"Seven Families was a catalyst for growth in both the IPTF and the IP industry; there's still a long way to go but it has got people thinking and talking about IP in a way that it never did before. The whole industry came together - it was fantastic."
I wonder if Peter would change anything about how Seven Families was executed with the benefit of hindsight.
"Its strength was that everybody had an equal share. It's very difficult where you've got a situation where some companies pay ten times what others pay and inevitably would want a little more influence. The joint ownership was very special because it meant there was a sense of collective belonging.
"The issue for Seven Families is where does it go next? There are a few people who think we should do another one but they don't realise that it's a big undertaking. You can't just press the Seven Families button and another one pops up and off you go again.
"Do we want to achieve exactly the same thing as we did before? Do we want to show people who actually bought IP and what it did for them? Do we want to look more widely than IP? Or what about doing the same thing again but with less catastrophic cases?"
Peter had recently been in the US with charity Life Happens, the creators of disability insurance awareness week.
"Having been there I think we feel that a protection awareness month or week would be a good idea."
Regulation - 'disastrous' from a protection viewpoint
Peter has been one of the strongest critics of protection's conspicuous absence from regulatory focus.
"Some of the recent regulation has been disastrous, from a protection point of view. It's tended to focus on a small group of people who have got money. There are an awful lot of people who are disenfranchised and it was obvious this was going to happen.
"It's like people who need basic cooking skills and you teach them how to cook caviar. That's what we've done as an industry.
"You haven't focussed on the basics and so you've got a huge number of people who haven't got the perception that they need advice or can get advice.
"A lot of advisers don't want to move into that segment because it's not worth their while. There's very little about protection in either the Retail Distribution Review or the Financial Advice Market Review.
"I've struggled when I've been to the Financial Conduct Authority. I don't think they've got protection on their agenda. I also recently asked someone from the Chartered Insurance Institute (CII) whether we could hold an event at their building, and he said, ‘I'm afraid you can't because we haven't got really any plans to cover protection this year.' If the CII isn't covering protection, what sort of message does that give?
"I go to events with very influential people and we discuss discretionary investment charges but we are talking about 3% of the population.
"This isn't an everyday problem for everyone. We're not talking about millions of people who, if they got seriously ill or died, couldn't pay off a mortgage meaning their family would have to sell the house and have nowhere to live.
"However, there are some great intermediaries who are really taking that to heed, such as Mark Graves and Sesame, Openwork and LifeSearch - who have driven a lot of the big campaigns in our industry.
Over the years Peter has won many accolades but the most prestigious honour was an MBE for life insurance services, which he received in 1999.
It was "completely unexpected"; he jokes that when the invitation dropped on his doormat he initially thought it was an elaborate hoax.
"I was very proud, my father was still alive and he was over the moon as were my wife and daughter. The day I went to the Palace was my daughter's birthday so I took her along."
He recalls a difficult discussion with an actress also at the palace receiving honours.
"I told her I worked in insurance and I could immediately see her bristle. This was 2009 in the middle of the crash, and she said, ‘they've given an MBE to someone in finance, I'm disgusted'. She turned on her heel and walked away.
"I didn't feel any guilt about what the protection industry does for people. I think we are communicating very badly with the outside world if someone has that view of what we do. We've always spent our life under a bushel."
Sentiments for the future
With that observation in mind, is Le Beau optimistic about the protection market and its future?
"I don't know. I'd like to be because you want nice thoughts about the future. You'd like to think we're going to end up somewhere that's conducive and you hope that living conditions of people are much better.
"But I don't think it's going to happen unless there's much more focus on protection and my big concern is the lobbying in the protection industry is very poor.
"I don't see many MPs getting excited about protection, other than about social care, and we've been kicking that around for 25 years. I organized a conference at Swiss Re in February 1990 and here we are in May 2017; we still haven't seen much progress.
"The other big issue is since the regulatory process began in 1987, there's been a series of crises. We've had endowment mis-selling, pensions mis-selling, PPI. Is that because we've got a regulatory system that's brought them to life? Or is it because we've had a regulatory system that hasn't been able to create the right culture within the industry? I think it's very much the latter."
"You've got this vast edifice now in Canary Wharf full of people who I'm sure are very well intentioned and incredibly intelligent but one part of their job is almost beyond anybody's remit: you need to have the right people that are passing on good habits to others.
"If you've got people with the right principles and habits teaching others, then you're going to have a better industry.
"There's still an awful lot of self-interest in parts of our industry that it's hard to eradicate"
But are the products and processes fit for purpose, I press.
"I would love to see the industry sell a lot more of the product. If we did that, we could probably underwrite it a bit more adventurously and on that basis we could look at removing many of the policy conditions. I don't think we are welcoming towards unemployed people and we want to get rid of as many exclusions as possible.
"Take Seven Families: five of those families went back to resume some kind of work that year and those were incredibly disabled people. If we can get those individuals back to work, I'm sure some of the claims that the industry have wouldn't be as severe as those.
"I think it's the pricing that we need probably to look at and then make the underwriting simpler."
Staying passionate about insurance
A popular belief is that protection insurance is boring but you've championed it for decades. What would you say to that?
"I've never been able to understand why people think it's boring. You can rescue people- it's a bit like working for the AA or the lifeboat service. It's boring because you spend a lot of time waiting for disasters to happen but the point is, what we do is absolutely brilliant.
"I love the passion of Vitality. I've worked for The Exeter [as a non-executive chairman] for a number of years. It's a smashing company led by a CEO [Andy Chapman] with real drive and dynamism.
"He cares about improving the industry and there are lots of good people in the industry but we've got to make more of a noise collectively."
Earlier we talked about your proudest moments but what do you think would be the one thing you want the industry to talk about you for?
"Something like his heart was in the right place. I've got strong faith and principles and they inform what I do in my daily life. I've tried to make families safer by making sure that that they're financially provided for in the event of something bad happening."
I could have spoken to Peter all day and in more depth about the protection industry, but after about an hour and half of discussion, I turned the dictaphone off.
At this point, he discussed the two big loves of his life, his family and as those of you who have met him would also expect, Arsenal FC.
He then thoughtfully questions me about my life, something that as a journalist, you are rarely asked by your interview subject.
If you could distil the essence of Peter, I think this is it.
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