An Industry on a 'Collision Course' with itself

In July 2008 I wrote an 'Industry Overview' blog post in which I stated that the Life & Pension Companies in Ireland needed to turn their business model on its head to ensure their future viability. So what has changed in the last 16 months that has given me hope for optimism?

The short answer is: nothing!!

It would appear that the management of these financial institution are running around like headless chickens as they struggle to cope with the reductions in new business and the exodus of existing business.

The main focus of their current business efforts is in 'buying' business. This is predominately directed at the larger corporate broker sector so the 'small' guys, like me, have become surplus to requirements as far as they are concerned. The management line is all about 'developing partnerships' with brokers but they fail to mention that it only applies to the 'big' guys. Needless to say, I have no time for managers that talk-the-talk but don't walk-the-walk.

What I would really like to see happen with these companies is that they seriously look at the following issues :

i) Service - The general level of service to customers is atrocious. Service cannot be defined as processing 'new' business effectively. You have to start looking after existing customers. Customers should be for 'Life not just for Christmas'.

ii) Factory Gate Pricing - Companies have to introduce this immediately. The current model based on full allocation with exit penalties is dead, and you know it.

iii) Simplify Products - There should be a maximum of only two types of charges that can apply to a product.

iv) Embrace Technology - All companies should give their clients full access to their products online. They should also embrace Social Media. There is only one life & pension office on Twitter and the last time they tweeted was 13th August.

v) Acorns - The future viability of your business does not revolve around 'High Net Worth' individuals. It rests with the the folks that want to start something 'small' and build it up in the future.

vi) Moral - You've got to look at boosting the moral of your staff. Your management are severely damaging your employees motivation.

If you continue to do nothing; you will win the race to the bottom of the Life Insurance & Pension market.