Is a specific protection trade body the best result advisers can aim for? Richard Verdin introduces a different option.
There is no doubt about it. If you are a regulator or legislator in the UK or Europe, in future you will be passing more laws and creating even more rules around the marketing, sale and purchase of insurance products, including protection insurance.
Recent events (just think PPI) and a new regulator are driving an increasing understanding of insurance-related conduct risks - not least the impact of properly understanding human behaviours around decision-making - Behavourial Economics.
The only predictable constant will be change. Of course, change is uncomfortable for many. However, with change comes opportunity and, as the Chinese proverb states: ‘When the winds of change blow, some build walls, others build windmills.'
But for either to be true, you first have to have a weather vane to identify that the wind is blowing, and in which direction.
Therein lies the issue for all intermediaries with a significant or specialist interest in protection insurance.
In our world, the watcher of the weather vane and then the facilitator for the construction of market walls or windmills is often the work of trade associations.
These are an effective way of pooling resources and expertise, and a way to achieve ‘cut-through' with industry stakeholders and opinion formers. But at the moment there just doesn't seem to be a trade body or entity tuned into or focused on representing you, the protection specialist intermediary, or your specific interests.
Industry representation
Now, by default, some of the actions of all ‘linked' trade bodies could have a positive impact on you, in some way acting purposefully or not so purposefully in your interest in the normal course of their activities.
At any one time it is possible that the Association of British Insurers (ABI), the Association of Professional Financial Advisers (APFA), the Association of Mortgage Intermediaries, the Association of Medical Insurance Intermediaries, the British Insurance Brokers Association (BIBA) or the Association of Travel Insurance Intermediaries (ATII) could be, by chance, acting in your interests.
But this means leaving a lot to luck or fortune, and that represents too much of a risk. It is too important to leave such matters to chance. Protection insurance intermediaries need some ‘thing' to represent their interests among all this change, to work with the provider's trade body and those representing consumers.
