We Consult

Why “We consult”?
How do frustration, lack of fulfillment and a fair degree of disgust sound for starters? A bit extreme?
I don’t think so. But the best I can do is give you this insiders view of the UK insurance industry. Read on: 
I’ve been in the insurance industry for thirty years and it took me a long time (circa 10 years) to get serious about it! Since then I have worked in a variety of senior roles both external development roles and internal management roles…with and without the development responsibility. I, like many of my peers, enjoy being an insurance broker when it is about delivering the best that you can to your client. Equally despising the industry when COVER, SERVICE and PROFESSIONALISM are deemed secondary to SALES. 
Achieving sales to SME and COMMERICAL/CORPORATE clients has inherited the worst features of personal lines marketing and product commoditisation. Compromise product cover (integrity) to aid strategy to sell on price for market share. Rather than re-invest in repairing products, innovating new products OR improving overall service delivery: subsidise front-line pricing to build and perpetuate “cheap is good” attitude that is reinforced by expensive multi-channel advertising campaigns. Sell hard and often via whichever distribution channel you are able. All the time telling the “valued” broker channel that they are different and better than direct or affinity deals and should sell on quality and service i.e. go head-to-head with the insurers massive advertising spend that brainwashes every level of society! A very successful recipe to rid a broker of much needed funds methinks. But that isn’t intended to sound like the makings of a conspiracy theory. 
Depending upon phase of “insurance cycle” insurers alternate between (1)FALLING/SOFT MARKET: ignoring sound underwriting principles and offering unsustainable deals to “partners” – substitute price for service; focus on gross written premium & market share. (2)RISING/HARD MARKET: underwriting the risk, “cleansing the book”; culling unprofitable “relationships”; focus on underwriting profit. 
Essentially, the greater the damage done in a soft market the faster/harder/longer the rating impact when the market “turns”. NOT SO MUCH A SERVICE INDUSTRY AS A DIS-SERVICE INDUSTRY. 
We are all feeling the effects of the worst excesses of INSTITUTIONAL GREED. It is not new. But in recent years has moulded a new audience of willing (if naive) consumers and through them and their “partners” in Government, had found a new status. Good for the ego and (personal) bank balance but now the truth is out and the sheer scale and impact upon the global economy have become apparent. SOME would say that individual liberty rather than just senior roles and pension benefits should be at stake! 
In 2008 we saw changes to the Companies Act that increased the burden upon Company Directors’ and Officers but apparently these recognise and address issues such as Corporate manslaughter. Apparently negligence, incompetence, excessive risk taking, call it what you will, aren’t the kind of things we should worry about in business if it is done on such a grand scale!
It all makes Nick Leeson look like he lost the petty cash tin…
Perhaps we should be grateful for the sheer scale and impact of these wreckless actions! Otherwise, how else could we prevent the spread of this “live for today mentality” to the next generations. Only problem is that whilst they will inherit this new (old) wisdom they are also saddled with the enormous burden that we have created for them. The result of a generation who were fed the message of consumerism and given the funds to feed the habit.
Generations of parents told their children to “put a little something by for a rainy day”, “never a borrower or a lender be”. The notion of “saving up” for something has  become a novel and amusing concept.
Our government are as culpable as the financial institutions for ignoring the signs. If the lines between the two weren’t already pretty blurred they became almost indistinguishable as the City transformed our economy…yep they did that alright! 
Can I just be clear that GREED is not exclusively the domain of institutions such as insurers, bankers, fund managers, etc. Similar examples can be found in other areas of our lives. Supermarkets and global retailers have also been under scrutiny for some time. Poor conditions for animals, food additives, excessive profits, child labour, etc. Hence the rise of “Fair Trade”, “organic”, “ethically sourced” and similar movements. People are making themselves heard and it’s OK for our Government to be seen to back the celebrities who champion these causes. Good old sound-bite politics, photo opportunities with members of the nanny state basking in the reflected glory. Certainly a whole lot easier and palatable than going head-to-head with powerful, well-connected and wealthy bankers whose former “successes” contributed handsomely to the feelgood factor that makes party politics so much easier!!!  
GREED is being exposed and CONSUMERS no longer seem intent on merely mumbling disapprovingly. We are re-evaluating how and where we spend our money.
Amongst other things, we want to know where it has come. Even in tough financial times the consumers are increasingly concerned about VALUE moreso than PRICE!   
All of these factors have “weighed heavy” on my mind over the last 3/4 years and I resolved to either get out of the business to do something more rewarding OR set about creating a business model that addressed some of the more obvious problems.     
Who are “We consult”?
That’s me!
The insurance industry has at least 101 different ways to damage it’s own credibility. Insurance broking isn’t treated as a real profession because it does not behave in a manner that is worthy of the tag; Failure to fully embrace technology or reliance upon legacy systems; Poor use of MI; Inconsistent service; failure to provide “peace of mind”; seen as unresponsive to client needs unless it comes with an opportunity for substantial profit; Customers view insurers as INSTITUTIONS in the same vein as banks…not a good place to be in the current climate! “ME” organisations intent on structuring Win/lose contracts. 
Blurred lines between Institutions (particularly Banks & Insurers) – regulatory bodies – government and NONE with reputation intact. Can you imagine how things would be in US if it wasn’t for the tide of hope that Barry O. has ridden into The White House!? Dubya would have been so tongue-tied that it may have required Washington Fire Dept. to free him.
Generation(s) that have previously been categorised (rightly or wrongly) as X, Y, Baby Boomer, etc. or other variations on the theme are, increasingly, embracing technology as a means of communicating and collaborating. Web 2.0 is here now and helping us to have dialogue on a global basis. People are more inclined to exchange and form views rather than accept the interpretation from their favourite newspaper or news station. I believe that there is an inevitability about more of these individuals becoming active members of Generation G.
Future: We all want to have one for ourselves, our children. The realisation is that the institutions in whom generations have placed their trust have spent untold millions brainwashing us to believe that they care about more than profit. Greater emphasis upon “People – Planet – Profit”. Realisation that more can be achieved by working together for the common good win/win. 
Interdependence embraced as a “higher state” than independence. 
INSTITUTION v COLLABORATION or In-house R&D v knowledge pool or ME v WE [listen to guys like Clay Shirky and Charles Leadbetter on this subject]. Telemarketing (& Market Research) v social media…people do not want to be sold to any more.   
So where does that put me/us this conversation? The trick, undoubtedly, is to read the signs, learn the lessons and shape a better, more giving, culture. 
I have been working on creating a model for broking that strives to utilise technology to:
    • achieve buy-in from interested parties (clients, prospective clients, peers, affinity groups) 
    • obtain creative input (markets, design, look, feel, etc.)
    • co-ordinate and reward internal/external contributions
    • market and deliver products and allied services to SME
Of course there is much more to it than that e.g. basis of insurer selection, unique product features, range of covers and services, that, when combined with a delivery method effectively change the unit of business (referred to by some as “Blue Ocean strategy”). The tired old “off the shelf” insurer products are so widely available via any number of competing channels that price becomes the main differentiator.
I always thought it strange that the wisdom of Warren Buffett: “Price is what you pay value is what you get” has never really “stuck” with insurers. But then again perhaps it is the role of institutions to talk about governance, prudence, compliance, etc. merely because they are qualities that they admire IN OTHERS!
I am always happy to hear from like-minded people and am determined to lead, in some small way, the change that HAS to come. So, if you can relate to my ramblings and have a genuine interest in being part of the change please feel free to get in touch and let’s see if we can get some real momentum into such a worthy “movement”.
Help rebuild Scotland’s reputation as business leaders and innovators. Let’s make it happen.  

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