AMII chairman Larry Bulmer talks to Angela Faherty about FSA regulation and his specialist intermediary business
"Like most people in the industry, I fell into insurance," says Larry Bulmer, managing director at Health Decisions and chairman of the Association of Medical Insurance Intermediaries (AMII). "I have found that is the way most people get into this business."
It was while running a small property company in 1993 that Bulmer decided to take a step into the world of private medical insurance and join BUPA as a sales adviser. Since then, he has never looked back.
"I enjoyed working for BUPA, but after four years I felt there was perhaps more out there in terms of other providers and products. You tend to get polarised working for one company so consequently, I went into the broker marketplace."
The change in direction resulted in the establishment of Bulmer's specialist intermediary company, Health Decisions. Today, the company has 11 staff in total. Six are advisers specialising in private medical insurance (PMI) and other health-related insurance products such as critical illness (CI) and income protection (IP).
While two of the six advisers specialise in the individual market, the main focus of the business is on the small corporate market.
"We are not chasing after the big guys. We are very much focused on the corporate market, that is SME's with up to 250 employees," says Bulmer.
The small corporate sector offers the greatest untapped potential in the market, and Bulmer believes the ever-changing needs of employers presents both a challenge and great business potential to specialist advisers working in the market.
"The SME market is very successful at the moment. There has been a move by insurers to bring in occupational health services and stress counselling helplines and other value added services, and I think this is something the market is increasingly demanding.
"Personally, I do not think being a specialist PMI broker and only advising on specialist PMI, is going to be hugely viable going forward. I think clients are going to be looking for more than that." Bulmer feels that clients will increasingly look for added value features and services surrounding the main product offering. He adds that many advisers may have to embrace this if they want to continue to flourish.
"Those just wanting to give straightforward advice on PMI may find it becomes harder and harder to exist. Having said that, in the individual sector, clients will always be looking for solid independent advice in contrast to the value added elements that appeal to the corporate sector, " he says.
In addition to running Health Decisions, Bulmer assumed the role of chairman of AMII in October 2001, one which he finds especially rewarding.
"As the chairman of AMII, I have a responsibility to ensure that all those on the committee are doing what they should be to further the cause of the Association," he says.
"I liaise with insurers and the industry to promote AMII and raise its profile. We want to get the message across that we are a professional organisation that wants to see the market driven forward and to work in partnership with insurers. That is crucial.
"When AMII was founded, the industry did feel that perhaps there was a bit of friction between intermediaries and insurers and that the relationship was not all that it should have been, particularly for the smaller broker, and this was something we wanted to address," says Bulmer.
With Financial Services Authority (FSA) regulation fast approaching, many intermediaries are preparing themselves for additional compliance costs and a new and unfamiliar regulatory regime.
In CP187, the FSA decided to withdraw its proposals to classify PMI as a high-risk product and the decision has been wholly embraced by the sector. Bulmer in particular, is very happy with the regulator's amendment and feels AMII's approach and its proactive involvement with the FSA certainly went some way to influence change.
"AMII had a lot of meetings with the General Insurance Standards Council (GISC) and the FSA to put across our point of view as specialist healthcare intermediaries. We needed to highlight what was perhaps appropriate for one area of the industry may not have been suitable for another, and some of these things have been taken into account.
"I think our point of view was certainly strengthened by the fact that the industry, under the guidance of AMII, showed a united front and great solidarity in the argument we were putting forward."
AMII's involvement with the FSA is set to continue unabated. The regulator is due to speak to AMII members at its forum which is taking place in October. "The FSA will inform us what we are going to have to do as intermediaries to ensure that we are running our businesses appropriately. It will allow members to ask questions and voice any queries they may have," Bulmer says.
With the changes to proposals now firmly in place, and a strong relationship with the FSA being developed, Bulmer feels regulation will have a positive impact on the market. Adapting to the regime may take a little time, but overall, it is likely to create a more solid and structured market.
" I think it will have a positive impact on the market, but I do not think that will be immediate and it certainly will not happen overnight. It will take some time for things to settle and for people to become accustomed to it. I think the market will need to see a few disciplinary actions and the ensuing consequences to gain some idea as to what exactly this means for the industry.
"FSA regulation is going to happen and if people do not embrace it, then they cannot work. It is as simple as that. It is the single biggest thing facing intermediaries at the moment," he says.
