Fiona Murphy catches up with LifeSearch's chief executive Tom Baigrie for the definitive interview on his firm's growth plans and his views on the protection market
Fiona Murphy: Following the extension of the CompareTheMarket deal, LifeSearch aims to write one in ten of all life and IP policies in the UK. How near are you to that aim?
Tom Baigrie: I’m careful to say by our estimation because we take our numbers and we divide them into Swiss Re’s Term Watch stats.
At the moment we sell one in 20 policies: we have to double in size over five years, which is not extreme. We think we have a model that does something really clever: uniting the online journey with the offline journey. It’s a long way from perfect, but the trend is to create digital advice. It’s not robo-advice because it doesn’t wave its arm about: its digital advice.
It’s creating a human interface within that online advice to answer individual questions and then to offer the phone as the alternative for people who want to talk: in protection this will always be a surprisingly large number.
FM: Tell me a bit more about LifeSearch’s partnership model for its staff?
TB: It’s normal company model in which there is pretty extreme profit distribution taking place, not just to those that are driving the business at the top end of it, but to everybody who’s been there three years.
The rationale behind that is in an advisory model the person facing the customer, whether they’re an adviser or underwriting support or tele-interviewing, they are taking responsibility for customer outcomes and therefore our brand.
The behaviour that our customer faces has to be both energetic and enthusiastic and positive from a business perspective but, above all, trustworthy, diligent, accurate, reliable and honest from a consumer outcomes perspective. You want to marry those two things up and if you ask anybody, you’ll find that it’s self-employment and ownership that engenders those two things most easily.
FM: But is there any risk to the employees that are involved?
TB: They have none of the liabilities that a partner would have. So, it’s a partnership in inverted commas, a bit like John Lewis’ partnership.
There are no downsides to this partnership and we accept that it forms part of anyone’s total remuneration – we hope that it puts us right at the top end of what one will get paid for any particular job. But it’s not meant to make anybody hugely rich.
FM: You’ve talked about expanding to South Africa and maybe the rest of the world at some point.
TB: We intend to open a branch in Cape Town on 1 September. There’s an awful lot of work to get through to make it happen on that day and we’re chasing our tail to get there but that is the plan.
FM: Why Cape Town – is there a Vitality link?
TB: No. The first aspect was that if your purpose is to get to one in ten of policies arranged in the UK, then you’ve got to accept beyond the immediate horizon. After that presumably you can’t get much bigger here, so you have to go abroad.
Cape Town has a lot of English first language-speakers and it gives us our first international experience. It’s also a market and place I know well, so all the real strangeness isn’t there.
We’re making it even easier for ourselves by just doing there what we do here. So, because it’s on the same time zone, that was another big factor, we can serve the UK market as if we were in Newcastle. The only bit that’s strange is the distance and the international bit. It’s not like a big step for a small business trying to begin to work out how to go global.
I’m hoping, five years from now we’ll know how to operate outside the UK. We’ll have made all our mistakes and learnt all our lessons.
We’ll have a template on how you morph a business model for a market and I’ve been reading for dozens of years about big businesses that have bought other businesses around the world and have found that whatever their magic ingredient was in the UK, it doesn’t work in the States, it doesn’t work in China, it doesn’t work wherever they are. I don’t want to make that mistake.
Where do we go next? I have, tongue in cheek, suggested Japan and Brazil, just because they are markets so foreign to our way of thinking that it would be really cool to go there.
I’ve been to Brazil and I did meet one of their insurance broking leaders and he said, I don’t think we do any life insurance online in Brazil. I thought, “hallelujah”, it’s a vast market.