The wise, old owls of insurance get many chances to put their views in print, but the young achievers rarely have a platform. Insurance Times has formed, with sponsorship from Royal & SunAlliance, a b ...
The wise, old owls of insurance get many chances to put their views in print, but the young achievers rarely have a platform. Insurance Times has formed, with sponsorship from Royal & SunAlliance, a board of young professionals to give youth its voice. In the first of a regular series, the board tackles the issue of image
Andy Cook, Insurance Times (chair)
Julian Edwards, personal lines broker, MCE
David Curry, commercial lines broker, Miller
Mark Walker, Royal & SunAlliance
Kerry Costello, Groupama
Simon Lockwood, Norwich Union
Alison Douglas, Cox Insurance
Gavin Buckley, Aon
Clair Hayward, Allianz Cornhill
Julian Edwards: There's not the image problem that the industry thinks there is. Talking of similar businesses - accountants, solicitors, and so on, they also have image problems and image concerns, but then when we look at their industries we don't necessarily think that they have serious issues.
Everybody has a responsibility to market the insurance industry - that is, everybody in this room, everybody that works for your firms, particularly the guys and girls that are answering the phone. Now we as a company are very big advocates of the FSA, and a lot of what probably I'm going to talk about today comes back to what the FSA is trying to achieve: honesty, integrity and prudence in running businesses. These are all things that are going to give consumers confidence and that's incredibly important.
Insurance policies aren't necessarily sold in the correct way, citing all the policy benefits and terms outlined on every policy. Of course they should be, and with the FSA coming along this is going to be a pre-requisite for anybody selling or administering insurance, so that customers can make an informed decision.
We sell on product benefits, we also explain policy terms. We've seen increased conversion rates because of that, which is important to us.
Attracting employees is not a big problem. We don't necessarily attract people from the insurance industry because there isn't a great volume of people in Northampton. Norwich Union made 250 people redundant in Northampton. Now, that was fantastic news for us and we've been able to feed off that for the last couple of years. We're very keen on our own internal training and we put all members of the team under-25 through the level three insurance NVQ.
David Curry: I, too, don't believe that there is a massive problem with the image of the insurance industry, but there are a few things that I have concerns about, one of which is client confidence and clients perception of the industry. Now, for me, as a generality, I believe that client perception of the insurance industry in total, brokers, insurers, everyone involved, is more negative than positive. About 75% of the clients I'm in touch with are purchasing insurance on price. They don't actually look at the cover they're purchasing, even if you draw their attention to it, they're more interested in the bottom line premium. They seem to view insurance as pretty much a necessary evil. Now, it's obviously a job of brokers and insurers to try to educate the clients. But I find that, because the industry is viewed negatively, any instance of an insurer or broker doing something they shouldn't be doing, is blown out of all proportion.
Andy Cook: What kind of things are you thinking about there?
Curry: The client perception is that insurance is one big pot. They don't make the distinction between life and general insurance. Generally, the moment I say I'm an insurance broker I get a load of verbal abuse on how their friend's pensions were mis-sold to them. So the pensions mis-selling is still damaging the general side of insurance. Also, clients aren't aware of what brokers do and what insurance is intended to do.
And clients who have never had a claim believe they're paying these premiums every year and getting nothing back. But the moment they start having claims they think insurance is interesting.
What the insurance industry must do is raise its profile to the level of accountants and solicitors. One way is by increasing the qualifications of the members of the insurance industry.
I would like to see everyone have compulsory insurance examinations, like the IFC multiple choice paper. It can give everyone a grounding in what they're supposed to be talking about, and it's going to send a signal to consumers and build up their confidence.
Mark Walker: I'm probably not as confident about the image of the insurance industry as Julian and David. For me, if you look at the type of people we attract and the way we communicate with people, we have a lot more work to do. Unless we dinstinguish between life and general insurance, as David's just alluded to, we all get thrown in the same basket. Is it up to the consumer to know about the insurance industry, or is it up to the insurance industry to educate the consumer? It's important that we spend more time educating, not only the people within the industry, but also the people outside, whether they're purchasers or not.
I am concerned that we drive a lot of people down the insurance exams route, when there are other exams such as the marketing diploma, which educates in a wider sense.
I did a little bit of research before I came here, I asked parents, colleagues, friends to throw me some words about the insurance industry and they mentioned "grey-suited", "stuffy", "not dynamic", "it's not a changing industry", "it's not exciting", "not the place to work" and lastly "not sexy". I asked them the same questions about banking, particularly the investment side, and they gave me "it's cool", "it's prestige", "it's potential to earn". That's the type of thing we have to work towards.
Generally, the way you conduct yourself, the amount of people that you need to know, the way you need to have concise messages, just your whole business approach needs to change.
We should be passionate about the industry we work in. We should be passionate about what we do. We need to be passionate about what the product is. We're a fantastic industry that sometimes over-complicates things.
Kerry Costello: Everybody's heard of someone where the claim wasn't paid. That is what everybody focuses on and not the fact that in the research that we've done the majority of claimants are satisfied or very satisfied with the overall way the claim was handled.
We encourage people to shop around, we encourage people to focus on the price, possibly we're encouraging people to take a cheaper option. Maybe they're taking something that doesn't cover all their needs and, therefore, when it comes to the crunch and they have a catastrophe and their house is flooded, suddenly the small print comes up and bites them and the claim isn't paid. So I think the education message through advertising and marketing is very important to improve the image.
It's not that long ago that I left university and insurance wasn't really on the milk-round agenda. A lot of people fall into insurance.
Cook: Was there much presence on your milk round from insurance companies?
Costello: No. Financial services, law and big brands were there. Although we have professional qualifications within the industry, they don't seem to necessarily have the same kudos with graduates as, say, accountancy exams, where everybody is saying: "Oh yes, I'm going to become an accountant. But still somebody would say that's boring and switch off.
Accountancy seems to have a higher status with graduates. At that level we need to push the fact that within insurance there's a huge variety of functions and tasks.
There are legal aspects and marketing in what we do. If you're a statistician it's probably an ideal job because basically it's a numbers game. People don't really understand the variety of jobs there are in the industry. They see it as being quite stuffy and old-fashioned, and yet there are many relatively new and dynamic companies.
Cook: It's quite interesting, just thinking about the idea that there are different professions, rather than being an underwriter or a claims handler within an organisation.
I don't get the feeling that there's much recruiting from outside insurance and therefore the influence of other industries' developments don't get transferred.
Costello: Yes, we're quite incestuous as an industry, maybe we should look wider and bring in some experience from other industries. Perhaps we can find someone who has done this in another industry - turned another industry around - that would help with improving the image.
Cook: Simon, how did you end up in the insurance industry, and specifically at Norwich Union?
Simon Lockwood: I did the milk rounds, did all the financial services, banks etc and then went to a number of interviews. Commercial Union said yes first, so that's the one I picked. It wasn't a proactive choice on my part, I wanted to go into an industry that offered a career path and was a service type industry. So at least there was some rationale behind my decision, but it wasn't insurance-led.
Cook: And how does your experience in the past few years compare with your peer group from college?
Lockwood: All of my peer group who I've stayed in touch with have found their way into the financial services arena. They view insurance as quite positive, believe it or not. They are an informed collective - and there lies the big difference. They know what it's about, they understand, when I talk about insurance. I don't need to explain anything, I can talk quite fluidly about it, they understand it. There are a lot of similarities to their industry - exams, governance, all that kind of stuff. Their rewards may be higher, but that's just the vagaries of the market they're in and the vagaries of the market we're in.
How do we manage our customer base? If you only manage them from a point of view of when you have a claim, you only manage, 40% of your customer base. If 40% of your customers have a claim, what about the other 60%. What are you doing for them? And do you want to see them at point-of-sale and renewal, or do you contact them if you have other things to offer that's insurance-related, but not necessarily insurance underwritten?
Progressing those kind of areas I feel will move the industry on, and the logical progression of that is how we use technology. On the train I had four texts from my bank and did all my banking on the way down. I'm constantly in contact, it's always there, it's always in my mind in respect of managing my affairs. Why is insurance any different?
Walker: Many benchmarks in insurance are not up to those of other industries. In other industries, if you can't implement technology in 12 month, they drop the project.
Lockwood: The final point is looking within your organisation for the people you try to attract.We have to accept that it's tough to attract people. That is an acceptance that people have to wake up to. From a PR point of view, we're not viewed as an industry that offers a career path, companies have downsized over the last X amount of years for as long as I've been in insurance, so that from a PR perspective it's not there.
Alison Douglas: I'm sitting here asking myself: why does image matter at all? Why are we bothered? And I have two answers. One is that it's about our customers. If we're realistic about this, why are we interested in what our customers think? Well, so that we can sell them more. And I know that's really not the best way of approaching things, but what we're trying to do is to make our customers happy so they'll come back to us. The second element is about recruitment and retention. We don't do things like graduate programmes.
There are different professions within the industry, but I think you're right, when people look at the industry they see a big bunch of underwriters in grey suits. If you look round this table it isn't like that at all. Before coming here I spoke to some of my colleagues and asked them what do you tell people when you're in the pub. One guy said: "I tell them I'm a marine biologist, it's more interesting than telling them I work as a general manager in insurance."
It would be nice to think that the changes that are coming up with the FSA are going to change things.
We can make the most difference in recruitment and retention, because it's about talking up our own industry.
I'm from a call centre background and in call centres CPD is seen as being something that you need to retain staff. What we want to do is give people a sense of progression, self worth. We restructured all our pay around CPD, not necessarily insurance CPD. As you progress up the scale and reach a certain skill level you automatically get a pay rise.
Gavin Buckley: Our bit of the industry is in a bit of trouble as well. We don't help ourselves much as an industry. There's a lack of co-operation between brokers and insurers. And we are very inefficient - there's a lot of reworking, a lot of re-keying.
We ask our clients for a lot of information which we don't actually use, so we're wasting their time, insurers are wasting our time sometimes and the brokers are then wasting insurers' time, because we're not doing anything with this huge amount of information that we have.
The ABI and Biba are not strong enough, They don't put the insurance point of view across as they should do. Our PR in general as an industry is very poor
A few people mentioned exams. That's only part of the problem, because we really have to look at competence. Exams are quite good for some technical things, but it's the application of that technical knowledge.
Aon recruits quite a few people from senior positions in banking, consulting, and the oil and gas industry, which is very positive because we have some good quality people there. But you have to be very careful about the messages as well because, as a 35-year-old, if companies aren't going to develop people like us, will we stay? Is it like a glass ceiling?
Clair Hayward: Even when I'm explaining what qualifications I have, I'll say: "I'm a chartered insurer, that's kind of like being a chartered accountant, but in insurance." I can't even say what I do without comparing it to something else, which I shouldn't have to do. I should just say: "I'm a chartered insurer."
We all do it, and maybe if one of us stopped doing it, we'd help our image ourselves. We assume the grass is greener, but it's not is it? It's just different grass really, it's not any better anywhere. Accountants have had a nightmare recently, with the scandals that are happening in some accountancy firms. They're no better than us, but we say they have more status than us.
But we create our own problems, we're not overly professional because our service is not the best. But it is probably far superior to a lot of other industries.
I work for a great industry, but we are hopeless at selling ourselves, yet we have a product that everybody has to have, we don't even have to force people to buy it.
Our professional bodies should do more, I do agree with what you said, I don't think the ABI, Biba and the CII market themselves to make us look like professional people. It's not just them, the onus is on every single person who works in the industry.
Walker: In our industry as a whole, we don't know when to act as an industry, we don't know when we all should work together and we don't know when to be competitive.
Image: now and the future
The board brainstormed adjectives for the image of the industry now and what we should aim for in five years and here's the results. If you can add to the list or have any comments please email:
How the industry is seen now?
How it should be seen in five years?
Good things that must be maintained