Look to the Stars

Tuesday 15th September 2009

What a great England performance that was against Croatia. One of the best in a very long time.
Good to see the West Ham influence (both current and ex players) coursing through the veins of the team.
The only problem is that everyone now believes we are going to win the World Cup for certain. Which is not a good thing.
 
Talking about a 5 star performance (what a link! ) this week my good friends at Defaqto invited me to their round table
event where they discussed, with representatives of the industry, what the criteria for their star ratings of products should be for 2010.
 
Defaqto's star ratings cover insurance, protection, banking, and pensions and investments.
I sat in on two sessions on payment protection and income protection.
In respect of payment protection it appears that the traditional market sectors of mortgage, personal loan, and credit card are likely to merge into a standalone short term income protection market. Where the protection product is not linked to the credit sale. A product I was in charge of at Pinnacle over 15 years ago - it's amazing how things come back around again.

The income protection session was to me predictable, with the audience concentrating on the complexities and technical aspects of the products
as opposed to how we can make them more attractive and easier to understand. Which leads me to my main point. While there's no doubt having a 5 star rating is an excellent
and eye catching marketing hook, the fact is the ratings are totally based on what products exist in the markets at the time. They don't rate innovation or creativity, which I think is preventing insurance products, particularly in the protection sector, from moving forward.

Adapting the current form of star ratings to include innovation could be quite difficult to do. For instance those providers who are currently holding 5 star status would be miffed if they lost it because their product had not improved or changed. Perhaps the answer would be to have a new set of ratings, which did capture innovation, and in doing so helped move the products forward? Or as in the case of standalone
short term income protection, as I mentioned earlier, backwards. What do you think of star ratings?

Steve Devine is business development manager at IGI insurance Company and chairs Protect - the Association of UK Creditor Insurers
Steve joined IGI this year from Cardif Pinnacle (formerly Pinnacle Insurance) where he spent 15 years, the last seven as the head of group corporate communications. Before that he was head of general insurance with Hambro Countrywide, the estate agency group.
Steve is married with four children and as a long-suffering West Ham fan, he has learned to cope with difficult and extended lean times.