There comes a point in all stock market falls, or in this case plummets, when onlookers could sensib...
There comes a point in all stock market falls, or in this case plummets, when onlookers could sensibly wonder if enough is not enough. For my sins, I can remember three previous financial crises, being made redundant as a result of two. Each time, we began to see double digit dividends and companies' capital value set at less than the realisable value of their assets. This might not be widespread yet but the markets are certainly beginning to impact on the day-to-day activities of some perfectly decent companies.
The larger insurers are seeing billions wiped of their capital adequacy mandatory reserves, with very little they can do about it. While this may not directly be a protection insurance problem, we can be sure that if times get too tight for these firms there will be some leak through into their protection offering. While things have not yet come to a head, we can only hope that the FSA is in a mood to realistically re-jig capital adequacy rules if necessary. To date, the regulator has been decidedly cagey with rumours of an assessment team remaining just that.
Still, it's not all doom and gloom. Anecdotally, the protection sector seems to be holding up well and one does not have to do any heavy media analysis to recognise that the consumer press has had many more protection features and articles than a few months ago. As Kevin Carr points out in his interview in this issue, when bad things happen on a large scale people look internally to protection. We seem to be in one of the few areas of financial services that could have a good news story to tell if the market can only capitalise on the zeitgeist.
To this end LifeSearch's campaign to get a generic industry wide protection advertising campaign off the ground is still slowly proceeding. While COVER has no concrete news for you this month, the firm said it is putting together a marketing plan, is still in talks with industry players and, as LifeSearch said, is spreading its net far and wide. Expect some concrete news on this front in a few weeks, hopefully by the time COVER's mid-monthly bulletin arrives in your inboxes on 13 November.
