John Ritchie envisages a changing tide for protection advisers as auto-enrolment comes into play.
“We look at it in terms of classic flex where there is employer-paid and employee-paid, right down to the other end of the spectrum, pure voluntary schemes. They will work well if there is a platform that is payroll integrated at the front and integrated to providers at the back.
“We see a blurring of those kind of boundaries between a pure individual market and the employer group market.”
Inevitably, it is all very well having the technology, the platforms, the websites, but how do you sell to people who, generically, do not like buying protection? Ritchie is solid in his belief that, if we help people to think about their choices, they will do the sensible thing.
He said: “What we have had is complex products that really did not focus enough on the consumer. Do you have to sell those? Yes, you have to sell those pretty hard. We are on the cusp of a big structural change in our industry and auto-enrolment is the main underlying trigger.” “We just need to think about all of the processes by which we deliver simple value production protection.”
If Ritchie can be said to have a favourite drum to bang it is the inefficiency of the market as it stands at the moment. He is well-known for mentioning that the timing of business is irksome.
He explained: “What I have observed is that the processes are the source of the operational risk. You can design out operational risk. If, typically, it takes three months to underwrite a peak risk from a group scheme, you are going to have situations where the underwriting is incomplete and the individual dies.
“Then the widow and the sponsor and the trustees are walking towards you saying, ‘He did have £2.5m cover didn’t he?’ And you are saying, ‘Well, no, actually, it was £1.5m, medical evidence free, but he did not complete the underwriting for the other million’. “You then get into a bit of a row about well, whose fault is it? Who lost the forms? Who cancelled the medical appointment?
“We also had, at scheme level, some very sloppy practices of completing the disclosure after we had gone on risk. That led to a small number of messy disputes and litigation. And if that ends up at the benefit consultant’s or the adviser’s door, where is their PI premium going?
“I had the privilege of stepping back and saying let’s have the drains up on all these processes, can we make it better for all parties? And in designing those things out we can make adviser firms more productive. “Our method is designed also to make us data obsessed. That means that we can refine the variables
by which we price things. But the level of automation is also about driving down the administrative overhead and we intend to be the most efficient provider in this space by far.”
