Insurance & Professional services

Are we so vain or focussed upon short term results that we can’t see the big picture?

How much easier would it be to attract prospective clients, convert new business and retain existing customers if the product(s) from your direct competitors only offer a one dimensional solution whilst yours provide a host of features and services?

I DO understand that terms like Blue Ocean strategy, Disruptive innovation, etc. can sound like phrases from a superfluous business language but that doesn’t mean to say that the best course of action is to cover your ears…a particularly unwise move in a tough trading climate. Instead try listening and interpretting the feedback from your customers and start to look beyond short term results to new opportunities to create a sustainable strategy for the future of your business.

What is your “Unit of Business”? Should your business be “limited” by the current range of products and services with increased pressure for sales (less scope to deliver service) activity and/or reduce pricing to maintain market share (refer to “Dual Pricing” blog item)?

 

You know what you do, as do your customers. If they already value what you do for them at the moment and you provide them with the opportunity to contribute to what you can deliver to them (and others) in the future they are less likely to be tempted by the “pile ’em high sell ’em cheap merchants.” In tough times these sales-orientated organisations get even busier trying to win your customers with mere promises! Why? Because the feed off the financial pressures that are impacting businesses on a daily basis

If you care about your ‘customers’ and the survival of your business get proactive. It may not be “attack” but it is a better form of defence than waiting until it is too late when you find out that, like many businesses in the current climate, your customers have reviewed current supplier arrangements.

Many are, understandably, coy about having believed someone else’s sales pitch. Even when their first instinct is to remain loyal and/or question whether the salesman can deliver what they need. Too many solid, longstanding, relationships are damaged (often permanently) by a lack of clear strategy based upon what you already do sufficiently well to have secured your existing clients and position in your marketplace.

IF YOU ARE INTERESTED TO LEARN MORE ABOUT HOW I AM TRYING TO STRUCTURE SOLUTIONS TO THESE ISSUES, CREATE NEW PRODUCTSAND TO GIVE SERIOUS PROFESSIONALS THE ABILITY TO BEAT THE SALESMEN PLEASE FEEL FREE TO GET IN TOUCH: davidmillbrae@hotmail.com

Interdependence

Various recent conversations had me worried that, (apparently) intelligent people still think of INTERDEPENDENCE as some radical, new, alternative to independence. Wrong!

Perhaps we have been so conditioned to strive for "independence", financial and political, it could go some way to explaining the economic predicament in which we find ourselves!?

Well, just to clear things up, here are the words of one ADAM SMITH:

“In civilized society [man] stands at all times in need of the co-operation of and assistance of great multitudes…man has almost constant occasion for the help of his brethren.”

Got it? He was an advocate of the free market too!

Just felt the need to get that off my mind on a Saturday morning…between episodes of Scooby Doo with my 4 year old daughter.

To further "rock the world" of any other Baby boomers out there:

the day started about the same time as my older kids occasionally get home

the particular episode was made in 1970…that’s nearly 40 years ago

I remembered it

the villain fancied he "would have gotten away with it if it hadn’t have been for the pesky kids"

…yeah right! Holly (the early riser) made the bad guy 5 minutes in!!!

Aviva UK could shed £1bn nwp by end of year

Now I’m not really an “I told you so” kinda guy BUT just about anyone within the (insurance) industry who knows me, including some current/former senior NU staff and many Scottish brokers, will [finally] realise why I felt so strongly on the subject. My stance didn’t endear me to some at NU…even former employers…but I HAD to speak up on such an important issue. Particularly when I believed that, to join the massed ranks of brokers who content themselves with moaning instead of acting, would be the equivalent to a dereliction of duty to clients, employer(s), colleagues. I nearly forgot about the credibility and stability of the industry!

Take a look at this brief article from broking.co.uk. (Aviva uk could shed £1bn nwp by end of year Broking). I have consistently warned of the consequences of NU’s “strategy”. The reputational damage done. Their feeble attempts to provide anything resembling service to longstanding, stable and profitable relationships amounted to “lip service.” Instead they promoted and sought out relationships (sic) that could provide turnover (gwp) because, if NU secured market share, others couldn’t. A cunning plan in many sectors but not one with a “tail.” Ask any underwriter.

Long term relationships are built upon trust, mutual respect and customer service.

You can simplify the products and market them like a commodity but at the end of the day they are NOT commodities. You need distribution but not at the expense of sustainability of rating or commission. You can sell on price…but surely NOT if you compromise the integrity of the product or “after sales” service. Customers will tolerate a lot if the price is low enough and with countless millions spent on promoting a “cheap is good” message even those who knew this to be contradictory began to doubt.

It’s got to be a pretty bad day when a long term strategy, reflecting the nature of the industry and built upon quality, relationship, value & service is replaced by abandonment of underwriting – in pursuit of quantity (marketshare) – making relationships transactional and at unsustainable rating and commission levels. Not the kind of thing that a beleaguered staff can align with either.

Some may say that the leadership were more interested in individual glory. Even that they were greedy. Why else would NU and others abandon sound underwriting practises? Surely that would be like a bank abandoning governance and that is just plain ridiculous…isn’t it!!?

Let’s hope that the spotlight doesn’t fall on Aviva because spending an obscene amount of money on a change of name (instead of on improving customer service) whilst using the recession as a justification for making further staff cuts probably wouldn’t read very well.

Despite all of this I still don’t think that it is too late for Aviva to regain some respectability but it will take dramatic change at the highest levels and guys like John Kitson do, at least, appear to have a handle on how to start the process.

Customers WILL pay more to socially responsible companies

Apparently even when the CSR message is poorly delivered people will pay more for goods (and services) that are not solely about feeding greed and profit. On the contrary put something “back in.”

We know that there’s growing –and well-warranted –skepticism among consumers regarding greenwashing, but what about public perception on the flip-side? Are companies getting the recognition they deserve for genuine achievement in environmental stewardship, human rights, philanthropy, and the like?

According to the results of a study released last month, the answer to that question is, unfortunately, no.

The research-based consultancy Penn, Schoen & Berland Associates, brand consulting firm Landor Associates, and strategic communications firm Burson-Marsteller polled 1,001 American consumers to test their perceptions of 69 different brands, 23 of which were also ranked in the Corporate Responsibility Officer magazine’s 100 Best Corporate Citizens 2009 (CRO 100).
The researchers found no correlation between performance on key metrics and consumer perceptions. For example, only 30% of consumers surveyed considered Gap, Inc. to be a socially responsible company, yet it ranked 61st on the CRO 100.

“There is a definite disconnect between companies’ corporate social responsibility initiatives and the public’s perception and awareness of them,” says Scott Siff, Executive Vice President of Penn, Schoen & Berland. “Companies are not successfully delivering messages to consumers about their efforts in this area, despite the fact that many consumers say they would rather make purchases from socially responsible companies.”

Siff’s comments are backed-up by data from the survey. A full 75% of those polled indicated a willingness to pay more for products from companies they know to be socially responsible. More than half said they can pay at least 6% more on a $100 purchase to patronize such companies.

But, even so, few survey respondents could identify a responsible company. Only 13% mentioned the top-scoring company (Bristol Myers-Squibb). No company stood out as a leader in social responsibility.

Clearly, organizations need to better communicate their CSR achievements with consumers –and, based on these survey results, companies that are successful in doing are likely to be rewarded with market share.

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How much more appealing to a customer then to know that, by their intellectual input and participation, they could bring genuine savings, benefits and opportunities to their business.In addition, by protecting, their business, by means of insurance products and a range of related support services, they have the ability to share in the profits they generate.

I am very interested to talk to potential investors, partners, participants and other genuinely interested parties. There may be scope to participate in shaping and executing a new business model. However, sorry to say that, for a variety of legitimate business reasons my/our preference (for Phase 1) is to work with Scottish firms unless there is a really strong case for consideration!

David G Wilson
M: 07919917150

Deloitte Explores the Business Benefits of Lifecycle Assessment | 2Sustain

Wal-Mart’s recent announcement to begin work on a universal Sustainable Product Index inspired Deloitte’s Enterprise Sustainability group to develop a new whitepaper that explores lifecycle assessment.

The paper, “Lifecycle Assessment: Where is it on your sustainability agenda?” points out that even though the concept of lifecycle assessment (LCA) has been around since the 1980s, it’s only now that U.S. companies are embracing it on a large scale.

At first, LCA may seem like a rather straightforward concept: analyze the raw material production, manufacture, distribution, use and disposal (in other words, all inputs and outputs) of a product so that you can determine its environmental impact. But, as Marc Gunther points out in his excellent post about everyday supermarket apple juice, the calculations involved are anything but simple –thanks to today’s complex global supply chain network.

Complicating matters even more, right now, there isn’t a standard accepted methodology for LCA. That means assessments can be challenging, time-consuming, and expensive.

So, does it make sense for companies to invest the time and resources to determine LCA for their products? Are there instances when LCA can deliver real business benefits?

Deloitte deep dives into these questions and concludes that LCA can be both powerful and beneficial –when used wisely. According to the paper, companies that use LCA can realize:

• growth and innovation
• cost savings
• internal alignment
• regulatory preparedness
• corporate reputation
• risk reduction

But even so, it’s clear that LCA cannot stand alone. In order to reap the biggest benefits, organizations need to incorporate LCA into their overall strategy for sustainability.

“LCA can be a core enabler of business decision made in the name of sustainability, but it is only one component of a broader sustainability performance management agenda which could include stakeholder engagement, improved information management systems to automate environmental performance data capture, and external reporting that follows the Global Reporting Initiative’s guidelines,” the report concludes. “Companies who succeed in integrating LCA with existing decision-making frameworks can achieve smarter sustainability.”

Learn even more by reading all of the six-page whitepaper available at http://www.deloitte.com/assets/Dcom-UnitedStates/Local Assets/Documents/us_es_LifecycleAssessment.pdf