Steve Devine: blog

Friday 1st June 2012

Things are looking up for me lately: life is being good to me and I am having fun. I have been around long enough to know that what goes up must come down, but also that you have to enjoy the moment.

The heady combination of the glorious sunshine and being able to jog in my Hammers shirt once again has taken years off me. My next pleasure will be to get my first look at next season’s premiership fixture list and see West Ham playing against the top teams.

Once the season starts, no doubt the clouds of dark despair will hover over me, as we get battered on a regular basis and struggle to survive. For now, though, I am still looking forward to reading that fixture list.

In my insurance world, Protect, the association I chair, has had a good start to the year. Our three forums have all been well attended. Protect has attracted several new member companies and individuals, and we have had a top-quality line-up of speakers.

At last week’s forum, Lucian Camp’s presentation had people crying with laughter – a sight you don’t always see at insurance gatherings. Especially when the message was that Protection Insurance has to compete with all the other things available in life that people’s disposable income and credit is spent on, including Sky subscriptions, holidays, household, bills, car repairs, and in some instances Bailey’s.

The protection insurance sector often refer to the ‘protection gap’ – I think it’s around £2.4 trillion – and bemoan that people do not buy the amount of protection insurance they need to protect themselves and their families.

I have just briefly read the ABI Consumer Survey Q1, 2012, and it reports that only 46% of respondents set aside time to plan their finances, ie savings, investments, debt repayments and insurances.

Of those minority that do, here is the league table of what they cover when they are planning:

General insurance – household, motor, and travel: 75%

Short-term savings: 67%

Long-term savings: 63%

Debt repayment: 37%

Retirement plans – 30%

Insurance for life events – 29%

Others – 3% (this must be the Bailey’s drinkers, Lucian)

So, protection insurance does’t do very well in terms of the pecking order of those that claim to be financially responsible. It has no chance with the majority of the population unless it performs a radical shift.

Which leads me to something I have been involved with lately – that is, trying to come up with such a solution.

I have been on the protection insurance working party of the HMT Simple Products Initiative. I won’t go into any detail here, but I recall a conversation about insurers needing to use occupation classes in their protection underwriting. Something that didn’t particularly concern me at all, it seemed quite reasonable in terms of risk.

However, when I got home I found myself watching ‘Rip Off Britain’, a consumer programme presented by three famous female presenters.

They did a case study of a man who had his car insurance premiums doubled because he was unemployed. He searched around and found that other insurers adopted the same stance on the unemployed. I am sure there is a sound mathematical reason why this is the case, but it’s morally wrong in my opinion. Surely this ‘kicking a person when they are down’ tarnishes us all in the insurance industry?

* Steve Devine is chairman of Protect, an association of companies and individuals working in the UK protection markets

steve@devineconnections.co.uk