John Ritchie envisages a changing tide for protection advisers as auto-enrolment comes into play.
“Many group risk advisers from the smallest generalists who do a bit to the very biggest employee benefit consultants were quite sceptical about our approach. So what quite a few of them did was actually do their own scheme. The first scheme they placed with us was for themselves as an employer.”
Of course, Ritchie is attempting to position Ellipse for the longer term changes he sees on the horizon. He is an evangelist for the whole sector, from FTSE100 companies to micro-businesses, moving to a platformed world.
“Auto-enrolment will make that happen,” said Ritchie. “The only way you can run an auto-enrolment defined contribution [DC] pension is on some sort of a web platform.
But how would protection fit within a platform world, integrating into those systems? Ritchie believes, to some extent, we are already there just that the group risk has lagged other components of flexible benefits, or platformed employee benefits, in getting this integration effect.
He said: “We are already live with data integration between Thompsons’ Darwin platform and our back office. “The clients get all of their group life, income protection, critical illness, employer-paid and flex, that is all accounted for within a salary month. You know what you are paying for the cover and the months that you have it. Just working like a DC pension.”
He added: “In the first quarter of next year we are going to be adding flex variance of our core product. Now, that technology, that web platform, is being democratised down into small companies and SMEs.”
Lot of iT work needed
It could be said it is fine for Ellipse because it is a new provider, with no legacy systems in place. For the whole market to move in this direction, there is going to be lot of IT work needed.
Ritchie said: “To be brutally frank, if some of the old touched by four or five sets of human hands business stays with the incumbent insurers, that is great. We are not built to service that particularly. We simply can see where the growth is and the growth is in platformed business, big, medium and small.”
If we take it as read that Ritchie is correct and that advisers having access to the right technology – the right automated tools – is critical to their future, where will this come from? Would they be provided for them by the provider they were working with, their clients or would they be generic?
Ritchie said: “We think that, by making employers auto-enrol people to pensions, a significant proportion will make a virtue out of a necessity and will come up with a broader-based employee benefit programme.
“Now employers will be more of a facilitator than a sponsor in that context. A sponsor, to help with the definition, is somebody who sets something up and also pays for it. A facilitator is setting something up and then getting the members to pay for it.
