Why the post-PPI era is a different kind of problem

Jason Berry - Uinsure
12th June 2018
" As brokers increasingly shy away from the taint of malpractice or scandal they have also begun to neglect their clients by NOT offering insurance options"

When the full implications of the PPI scandal finally broke in the mid to late 2000s, it immediately spotlighted a number of self-evident realities, both within the industry itself and beyond.

Firstly, that financial mis-steps such as these - a veritable orgy of unfettered greed - were ruinously damaging (not to mention exceedingly unprofitable) to companies in the long haul. Secondly, that the uber-aggressive techniques used to sell this deeply flawed (yet hugely lucrative) product, ultimately placed brokers and the industry at large in the worst possible light; exhibiting a brutal disregard for the needs of customers and compromising any previously held notions of integrity. In short, it was a public relations disaster.

But, times have changed. We now live in what may be euphemistically described as a ‘post-PPI era’; an age defined by a greater care of duty to our custom bases and a determined refusal to interact with the ‘darker’, riskier side of the industry. Lessons have been learnt, old practices put to the sword.

And yet, ironically, over the past few years, this new and enlightened attitude has come to represent an entirely different kind of problem in and of itself. Namely, that as brokers increasingly shy away from the taint of malpractice or scandal they have also begun to neglect their clients by NOT offering insurance options - victims of a PPI fallout perhaps; too cautious, too reticent.

Which is why we need to remind ourselves why we sell insurance in the first place. Insurance is all about protecting customers from the trials and tribulations of outrageous (mis)fortune - a frontline in the ‘war on fate’ as it were. Indeed, as Andrew Brem, the chief digital officer at Aviva, has so memorably put it: insurance is ‘unbelievably dull (but) it is bloody important’ (and amen to that!). But, we also need to remind ourselves that these inherent benefits and protections simply cannot be accessed if brokers choose to remain dormant or suspended by fear, so steps have to be taken to address this failure.

Because selling insurance isn’t just about protecting people from unpredictable external forces so much as protecting them (in many cases) from themselves. We are all aware (no doubt) of the upturn in clients choosing to ‘go it alone’ over the past few years, for example; disregarding sound financial advice in favour of the online lottery of largely sub-standard, dual priced, ‘hollowed out’ bargains.

Moreover, we have also witnessed a demonstrable increase in consumer ‘disengagement’ from the insurance process and the low levels of understanding that this has engendered (to the point where even customers are unsure as to the material worth of the products they are choosing). Which is why it is now imperative for brokers to step up and do what they are supposed to do - protect their clients. Whether from seasoned advice, knowledge of suitable products or by pointing out the prat-falls of comparison websites, we need to offer our services to all of our customers, all of the time. Because anything less will amount to letting those customers down.

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