60 Seconds with....Simon Burgess
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Why have some brokers given up on selling protection products?
Because the sector is under the regulatory spotlight. It’s impossible for brokers to do anything other than serve their own interests and they daren’t sell protection.
Should the Retail distribution review apply to protection?
Yes it should. Protection is fundamental to the welfare of families and it should be properly controlled - it’s too important not to be. It needs to be reviewed so it is sold in an appropriate manner.
Advisers should sell protection but not on a commission basis. It should be a fee-based product. The problem arises when advisers sell policies that pay the highest commission. In the grand scheme of things protection is more important than investments and should be sold as such. Fee-based propositions will cut prices and enfranchise more consumers.
Have you seen sales of mortgage payment protection insurance increase in the recession?
Yes, by 300%. Consumers are far more aware now that they may lose their jobs. Fortunately, we’ve never had any situations arise whereby claims cannot be made. We go through exhaustive processes to ensure we don’t sell policies to people who can’t claim. Obviously that involves more work for us but we’ve never had a justified complaint and have paid 100% of all genuine claims.
What do you make of tory proposals to scrap the Financial Services Authority in favour of the Consumer Protection Agency?
It’s a great idea but because we offer insurance and have provided redundancy cover to a considerable number of Financial Services Authority staff I’m concerned about our loss ratios. At the moment this is only a proposal but my advice to staff at the regulator would be to buy cover now.
I suspect a lot of insurers would like to decline FSA staff from making claims.
What’s the strangest insurance policy you have ever sold?
I provided erectional risk insurance to President Bill Clinton at the height of the Monica Lewinsky scandal. The £1,000 premium was paid by the Republican Party.
I also hold the Guinness World Record for insuring a bird. Violet, a Rhode Island Red chicken, was insured for £1m against being killed and eaten by the chairman of Finchingfield Parish Council. She later died in mysterious circumstances so the claim could not be justified.
