Only 37% of the UK’s adult population has brought or thought about buying life insurance. A recent study conducted by MoneySuperMarket suggested homeowners with dependents were not taking out life insurance due to ‘widespread myths’ about cover, including concerns over it being too expensive and insurers not paying out. In addition, only 15% of people surveyed by a recent EY study considered life or health insurance as a top three priority to protect financial wellbeing, compared with 77% prioritising savings.
LifeSearch is the UK’s most awarded and biggest life insurance adviser and specialists in helping families and businesses get the right protection since 1998. They provide support and guidance to our clients and their businesses on life protection, insurance, critical illness cover, share-holder protection, keyman and income protection. In our latest article for the View, we speak to Tom Baigrie, Chair of LifeSearch on the importance of life protection and his 40-year experience in protecting families.
What led you to work at LifeSearch and what does your role entail?
I started life in England aged 20 and the only job I could get was as a self-employed commission only life insurance salesman. I turned that start into a wealth management business, Baigrie Davies, and eventually sold it to Standard Life back in 2016. As a spelling pedant, I’m glad I left before they rebranded to Abrdn! Back in 1998 though, I grew to feel that consumers would prefer to buy their simpler financial products, like life and disability insurance over the phone, from people who were specialists, who really knew their stuff, not financial advisers who did a bit of protection. So, I set up LifeSearch to give them that chance.
Why should people have life insurance and why is it so important?
It’s to answer the question, “How would your family, or business, cope financially were you to die?” If you can answer that question with a clear conscience great. But if you have dependents and can’t answer that question then you need life cover. But in Britain, that generic is used to cover three types of policy: life insurance, income protection insurance and critical illness insurance. I’ll leave out the latter for now, but the middle one is a form of disability insurance, and the question relevant to almost every worker is, “how would you cope if you were disabled and couldn’t earn a living?”.
Some employers have ‘Group Income Protection’ policies, but in today’s gig and SME dominated workplace it is shocking how few people, who do insure their possessions, do not insure the earnings engine that pays for everything. It doesn’t help that our market is very bad at explaining that need to consumers, but still, it should be obvious! LifeSearch arranges more individual income protection policies than any other firm, and many group schemes too. If you aren’t retired, super-rich, or too poor to care, you need to get income protection. It’s available for carers and home-makers as well as paid workers, and the policies we arrange pay out no matter what causes the disability, be it illness, accident or mental health, which is one of the most common reasons for successful claims.
How can someone ensure they have the right life insurance in place for them and their family? How does LifeSearch help?
You can do the applied maths yourself, using, say, the age of your youngest child and their likely point of future financial independence, multiplying the income the family relies on by, say, 10 or 20 times, and adding any debt, but there is a bit more to it than that and it costs no more and is far safer to speak to an adviser used to working out the sensible questions to ask to lead you to the right answer. Of course if you know exactly what you need and are in good health and time is what matters most, then a price comparison website will do. Moneysupermarket and Compare the Market will give you prices and the ability to deal there and then, but also the opportunity to speak to a LifeSearch adviser while you make up your mind. Advice costs nothing extra and gets you great protection from the financial ombudsman should something go wrong at the claims stage say. We recently helped a customer who was originally quoted an extortionate amount for a policy based on a rating at the application stage due to a mention of ‘breathlessness’ combined with being an ex-smoker. When they approached us we realised that this was producing an unnecessary rating to the customer, we investigated it further, getting extra information from the customer and raising it with underwriters directly, challenging the original decision. This led to the family being protected and with standard terms.
What has been your career highlight to date?
Well the immigrant story is that I came to the UK aged 20 after school and military conscription in South Africa and could only get a job advising on life insurance on a commission only basis. And 41 years later, my business is the UK’s largest protection adviser by quite a long way. After working in insurance for so many years and after selling Baigrie Davies, in 2016, I knew my passion was for protection, not making rich people richer, so I spun off LifeSearch and went on from there. There have been many highlights, but the one I’m most proud of is coming third in the 2019 Sunday Times Top 100 places to work for in Britain. The highest ever ranking for a first-time competitor. Passing our millionth family protected milestone a few years ago left me feeling I had done some good in the world too.
What is the Protection Distributors Group (PDG) and what do you do for the group?
I helped found the PDG with the sole purpose of improving what the protection market does for its customers. Today the board comprises leaders from 12 firms, from St James Place to LifeSearch to several near enough one-man bands. Our membership now accounts for c60% of all protection policies sold with advice. We have to-date signed up most insurers to a ‘Claims Charter’ of benchmark levels of service when handling a claim, and separately got them to all agree to pay out for funeral costs when probate has not yet been granted, amongst other improvements to customer service. Currently, we are leading a campaign to see insurers act as gatekeepers to our market, by mystery shopping distributors with very high early policy cancellation rates. Many of the ‘unknown’ brands advertising on Google or across social media cause considerable consumer detriment and the FCA seems unable to act on the issue. We see it as our market’s duty to protect its customers and indeed its reputation. Insurers, who after all fund all distribution, including the rogue elements, need to step up and monitor what’s been said in their name and clean it up.
What’s next for LifeSearch, what do you want to achieve in the next five years?
After a long run of rapid growth before and through the pandemic, this year is one of regrouping for our next big step: becoming a consumer brand recognised for what we are, the best at what we do in personal and business protection. Our business team is our fastest growing with many BIBA, ICEAW and Law Society members signposting their customers to us for protection help. Along the way, I decided I need new energy and skills and so recruited Debbie Kennedy to replace me as CEO last year, following her impressive success as MD of LV’s Life and Pensions division, and before that helping lead the transformation of Royal London that saw it rise from doing almost no business to being one of the UKs biggest life insurers. Our most significant recent appointment was by Which?, the consumer group who now advocates all their customers with protection queries to trust LifeSearch to help them.
What could be done to raise awareness of the importance of life insurance?
Most people have at least a working knowledge of what Life Insurance might do. But as to their need for it, ever fewer fear the rare catastrophe that is death during working age. And that’s doubly true of income protection which is claimed some six times more often. Awareness campaigns could change this, but there’s no doubt that the biggest gain would be if professionals advising business and personal clients on their tax and financial affairs, property purchase, mortgage and debt transactions highlighted the need for protection for those whose financial risks and responsibilities they are helping increase. We call it signposting clients to protection, and LifeSearch’s key business model is to form relationships with those who ordinary people rely on for any and all forms of financial advice, so that, through a simple referral, they can help with protection too. Some firms have turned it into an entirely new revenue and profit stream. It’s great to earn good money doing something good for your customer.
What benefits do you see in the reform of the life insurance industry?
Our market has been pretty stagnant, perhaps except for an 18 month blip upwards during the pandemic. But consumers need us as much as ever. If we are to resume growth we must first ensure that all consumers who approach us get a fair deal. At the moment a growing number don’t. Those that self-serve online do, as do those who take advice. Both routes do what they say they will. But the fastest growing route is a thing called ‘non-advised telesales’, or more euphemistically ‘guidance’ delivered over the phone’. In practice it is a highly persuasive and profitable hard sell, often delivered in a blizzard of unsolicited calls, and that puts the sale way ahead of the customer’s need and makes that viable by denying consumers the protection of the ombudsman, without explaining that. We need to reform the worst behaviours of such distributors or face ever declining consumer trust.
How does Michelmores help you to achieve your business goals?
I first used Michelmores when selling Baigrie Davies to the FTSE30 giant Standard Life. I was impressed by the resilience and determination they showed in the face of the serried ranks of lawyers and accountants sent in to grind us down. Since then most of the work has been contractual, which means again negotiating with some of Britain’s biggest brands. For all the big ticket things, we find Edwin Richards and his supporting teams, as well as those experts he brings on to help us with occasional oddities like patent law, to be excellent and personable and effective.