Archive: Jul 2015

Why is the right culture important?

Even though the General Election took place over a month ago, many people are still talking about how it was such compulsive viewing, with many staying up until the early hours awaiting the result.

The fascination was watching all of the opinion polls and predictions fall by the wayside as the losing political parties accepted their fate graciously. How did these parties get their strategy so wrong, why did it not deliver the clear objective to win the election with an outright majority?

Commentators gasped as the charts changed to a sea of blue and the Labour party were in shock as they saw virtually all their Scottish seats lost to the Scottish National Party in one night. Surely if the Labour party had been close to their customers and understood what they needed to do to get their vote they would have changed their tactics to secure those votes.

What was their strategy and did they have the right culture within the party to question the tactics to deliver that strategy? How would it achieve the end goal?

If people are afraid to speak their mind and go with the majority to keep the peace that is a culture that doesn’t work in either politics or business. If the public didn’t see Ed Miliband as a strong credible leader, why did the Labour party not see that either? If they were in touch with their customers surely someone would have stumbled across it.

It is the same in business – we set a goal, we put together a strategy to achieve it and then look at the tactics required to deliver that strategy. As always it is the team that you build around you that adds the magic required, they need to feel valued and listened to, their views are important to ensure you get the tactics right.

Once the team understands what is required of them and why their role is so important to deliver the overall strategy you have a good chance of achieving your goal. Setting the right culture is in my view essential, and putting the customer at the heart of the business is a culture that works well and leads to success. We have seen what happens when you don’t!

A Future Vision of Protection

Wearable technology is not tomorrow’s world, it’s today’s. The number of wearable devices shipped worldwide in the first quarter of 2015 hit 11.4 million, up by 200% from the previous year. Apple’s flagship watch is becoming especially popular in the UK, as the nation rushes to embrace an era where consumer analysis is king.

But whether actively or passively, these devices have been collecting consumer data for several years now. This has made many insurers take notice and begin to consider using big data to analyse the metrics on their customers, in the way that “black box” recording is having an impact on the car insurance industry.

The simple fact is that there are very few providers left that do not believe wearable technology is soon to have a significant impact on the industry, with many in the process of drawing up business strategies to incorporate these devices.

A win-win scenario

Reducing the risk of ill-health from a consumer’s perspective is always a good thing. Also, because it lowers the risk of claim for insurers, consumers are starting to benefit from reduced premiums and rewards for staying healthy.

Vitality is one of the providers in the UK leading the way in using this new technology as part of their offering. Their honest assessment of the situation: “It costs us less to look after you. So we can pass those savings back”, is the basis of a reward scheme to empower the consumer through logging counted steps, calories burned and attained heart rates.

Big Brother is watching you

Could insurers use registered data on consumers during the underwriting process, at the time of claim or at the point of sale? Sceptics might assume that this will also mean insurers could increase premiums if your data is negatively impacting health. But so far providers are choosing to engage with customers through encouragement and empowerment first, before risking negative media.

Not just the amount, but the accuracy of the data will also need to be carefully assessed, to ensure that there has been no black hat techniques used, such as physically manipulating the devices. These issues will no doubt become more complex and it is important that an honest and transparent approach is taken by both consumer and provider alike.

The beginning of a beautiful friendship

Could this be the beginning of a new, stronger relationship between consumers and providers? Providing consumers with free technologies to monitor fitness and health could help to open up a long-term interactive consumer engagement where rewards and discounts are on offer, especially those that lead towards a possible premium discount.

There is of course still some scepticism as to how much providers could and should utilise consumer data, but empowering consumers with the ability to have real-time engagement with their policies may just be the link that bridges the protection gap in the UK. One step at a time it seems needs to be taken from both consumer and provider, as wearable technology weaves it way into industry view.

Sally Laker named ‘Business Leader’ of the year at the British Mortgage Awards

Sally Laker of Next Intelligence mortgage club, one of the UK’s leading providers of mortgage and financial services, has been named ‘Business Leader: Next Intelligence Mortgage Club’ at the British Mortgage Awards 2015 on Thursday, 9 July.

This year marked the British Mortgage Awards 10th Anniversary, associated with Mortgage Solutions. The event recognised the stand out achievements of the most deserving individuals in the UK Mortgage industry.

Sally saw off strong competition to pick up the award at a gala ceremony held at the Park Plaza Westminster Hotel in South Bank, London. The awards were judged by a panel of industry experts who chose the winner. Attended by over 500 guests, the British Mortgage Awards 2015 were presented by Phil Rickards, Head of BM Solutions, and headlining the evening’s entertainment was comedian, Ed Byrne.

Commenting on this award, Sally Laker, Managing Director, Next Intelligence, said:

“I am delighted to have won the British Mortgage Award for ‘Business Leader: Mortgage Club’ for Next Intelligence, especially against such a talented group of finalists.”

If you would like to join our award-winning Mortgage Network as an appointed representative or become a member of our Mortgage Club, contact our Broker Support Team on 0845 130 7446 opt 1.

Mortgage Intelligence Compliance Update: Treasuring Trusts

Head of Compliance Stephen Adams explains when and why advisers should talk to their clients about the benefits of placing a life policy into Trusts.

With so many protection challenges facing advisers today, we know how difficult it can be to find time to discuss every possible element of Life Assurance with your clients. But according to one leading provider, only about 10% of life policies are currently written in Trust, which suggests that in some cases consumers are not aware of the potential benefits.

In some situations a Trust is likely to be neither relevant nor advisable. However, there will be times when the best consumer outcome will point towards a Trust and clients must be aware of all the potential benefits or disadvantages relevant to their circumstances.

When should I talk about Trust to my client?

Essentially it will be down to the adviser to recommend what is in the best interest of the client. However, as a very general rule: Joint life policies are less likely to require Trusts , as are Single Life Policies where the client is married (but note this is dependent on the level of cover and the latest intestacy rules). But with a Single Life Policy where the client is not married, Trusts can play a very important part and should therefore necessitate a conversation with your client about writing their policy into Trust and ensuring the correct distribution of pay-out.

How can clients benefit from putting their policy into Trust?

Avoiding probate: A legal process which confirms an executor’s authority to deal with possessions. This lengthy process currently takes, on average, six weeks and for more complicated cases can be many months. Putting a policy into Trust will avoid this and any even lengthier connotations such as intestacy, which can be a stressful time for your client’s family and loved ones. If a Life Assurance plan is in trust, it is no longer part of the settlor’s estate so therefore probate is not required as the funds are paid directly to the trustees to distribute the funds.

Helping to reduce Inheritance Tax (IHT): By putting a policy into Trust, your client may avoid the policy being absorbed into the deceased’s estate and being liable for Inheritance Tax. The Government raised £3.3 billion in IHT revenue in 2013/2014 and admits that this number would be significantly reduced if more polices were written in Trust. Any assets left to a spouse or registered civil partner, provided they’re UK domiciled, are exempt from inheritance tax. But this can be often down to whether the policy is kept in Trust until its next 10th Anniversary.

A note from the Compliance Team…

It is important to remember that the above is a very general guide and specific thought needs to be given to each individual customer circumstances. Advice can also be sought from legal helpdesks of product providers. If in any doubt, then an adviser must guide the customer to seek legal advice and record this in the Reason Why Letter.

If you would like to join our award-winning Mortgage Network as an appointed representative or become a member of our Mortgage Club, contact our Broker Support Team on 0845 130 7446 opt 1.

Mortgage Intelligence Protection Update: A Critical Illness Review

Head of Mortgages and Insurance Stephanie Charman investigates whether the increasing number of covered conditions has made the critical illness industry too complicated for consumers and advisers alike.

When Critical Illness (CI) cover first arrived in the UK in the 1980s, it was a concise concept that originally covered just four conditions. We have now come a long way in ensuring that as many conditions as possible are covered, which is for the most part a positive thing for consumers. But has it now had a detrimental effect on the industry, over-complicating it for consumers and advisers alike?

Does Critical Illness needs reviewing?

Despite published claim statistics and the improvements to cover, CI sales in general have remained stagnant. As a result, the protection gap in the UK has also remained unchanged. This begs the question: has the continuing addition of conditions conversely dampened the attitude towards CI?

For a number of years, providers have been engaged in competition known as “condition counting”. This has been exacerbated by the general adviser preference to go with the policy that covers the most conditions, providing a perceived “value” to the protection. But this has led to a complex and confusing market for both advisers and consumers, as they struggle to understand and absorb information regarding the most obscure conditions.

However, experts suggest that we are reaching peak saturation of condition counting, and surely all a client is looking for is surety that providers will pay out when they need it most.

Ensuring clarity for consumers and advisers

Currently the five main conditions (cancer, heart attack, stroke, MS and Children’s Critical Illness) account for 88% of all Bright Grey’s claims, which highlights the importance of these central conditions. Munich Re’s Julie Scott suggests: “One simple answer could be for insurers to consider realigning the features of the product with its actual name and focus once more on the truly critical conditions that have a fundamental impact on consumers’ lives.” This would certainly help advisers to use relevant statistics to support their client conversations, such as the recent research regarding cancer survival rates in the UK.

Since MMR the onus on the intermediary has become even heavier and providers must ensure that the brokers benefit from protection change as much as the consumer. This means ensuring advisers have the means to effectively match consumer circumstance to policy options, so that consumer outcomes are effectively and consistently met. This will in turn result in more positive protection stories with substance, instead of simply publishing statistics that are read by few outside of the industry.

Creating a brighter future for Critical Illness

Providers need to simplify and expand at the same time. This may seem contradictory, but if expanding means offering more than just financial protection, then the simplifying can happen within policies. I wrote last month about Friends Life’s Global Treatment, which is the sort of outside-the-box thinking that is becoming vital as we move into an era where advanced treatment means more people are surviving disease and illness.

Some experts believe in a more radical approach to changing CI. But as long as the condition counting ends, definitions become more concise for consumers and providers continue to vary how cover is delivered, we will hopefully witness a shift in attitudes. Advisers are financial experts, not medical, which is why there is currently some timidity to enter a CI market saturated with complicated and esoteric criteria. To help you, we have a protection helpdesk of experts ready to assist in locating those tricky cases and deal with obscure conditions.

If you are interested in becoming an appointed representative of our award-winning Mortgage Network or a member of our Mortgage Club, contact the Broker Support Team today on 0845 130 7446 opt 1.