Life Insurance International (LII): How would you describe the journey taken by Aegon UK’s protection business since 2010?
Dougy Grant (DG): Back in 2010, I think it is fair to say that we were not as focused on protection as we are now. We had just gone through a lot of transformation as a business and part of this transformation led to management changes.In addition, various people who were involved with running Aegon’s protection business also had other responsibilities in pensions, which often took top priority.
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There was a period [a few years ago] when the market questioned our focus on protection and we had not focused on improvements to our proposition.
However, over the last couple of years we have addressed the situation and we are starting to see the benefits of that.
For example, we have now got clear leadership and focus on the protection business. This means I am 100% accountable for the profit or loss in Aegon’s protection business and I’m also 100% dedicated to the protection business, as are all my teams.
It is this focus that has allowed us to drive the business and we have seen [protection] volumes grow 20% [year-on-year] since 2013 [Q1-Q3 2014 v same period in 2013]. The foundation is also set for continued growth in 2015.
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By GlobalDataLII: What is the strategy for Aegon UK’s protection business in 2015?
DG: We have quite an ambitious development agenda for next year and going forward. That can be summarised in three key points:
– In the first place, this involves enhancing the digital experience for customers and that is going to be a long-term journey
– We also need to continue enhancing our product proposition as we have done over the last 12 months. For example, over the last year, we have launched a relevant life product, refreshed our critical illness product and most recently launched our whole-of-life product.
– We will continue to enhance our product proposition range in 2015 and beyond because that’s important for customers and advisers.
– Finally, the third thing we are going to do is better integrate the promotion of our protection range alongside our platform proposition. We are going to make the most of the strengths we have got as a wider organisation and encourage holistic advice from the wealth advisers.
In H1 2014, we saw our protection volumes grow [year-on-year] among wealth advisers by 40%, so we have focused on that segment, as well as dedicated protection specialists. That growth has continued in the second half of this year.
LII: What customer segments are Aegon UK’s protection business focusing on?
DG: There are two core segments we are focusing on. On the individual side, there is the 40 plus wealthier end of the market; and on the corporate side, we are focusing on SMEs to offer business protection.
The reason we are focusing on these markets is that we have a strong capability and heritage in both of these markets and we are seen as one of the leading players in business protection.
Both of those target markets also strongly overlap our platform business, so there are significant synergies there.
LII: How has the Retail Distribution Review (RDR) impacted Aegon UK’s protection business?
DG: I think the theory in the run-up to RDR was that the protection sector would be positively impacted as advisers would seek to give more holistic advice because they could still earn commission on protection.
However, in practice, it did not really work out like that, and certainly not for us. At first, we saw our business being negatively impacted by RDR as advisers left the market and banks’ distribution capability was reduced for a period of time. That harmed our distribution capability as we are very successful in banks.
Nevertheless, now we are starting to feel the positives of RDR, particularly as the volumes of protection among wealth advisers are growing faster than ever before.
LII: What have been Aegon UK’s key achievements over the last year?
DG: Firstly, the fact we have built a new and experienced protection leadership team with a 100% focus on protection. Secondly, rebuilding our proposition and thirdly growing volumes 20% [year-on-year] in 2013. As a subset of that we have grown volumes in the wealth adviser space by 40% [YoY].
We have also secured future investment to continue to improve the proposition and digital customer experience. These are all achievements in the current environment.
LII: Is Aegon UK considering using any new channels for its protection business?
DG: Historically and currently, IFAs and banks have been our distribution channels. However, as with any business, we will always consider new ways to reach more customers and protect more families and businesses.
LII: How important do you expect mobile technology to be as a distribution channel in the protection market?
DG: The technology you use in channels needs to move with customer preferences. I think that any organisation involved with consumers should be examining mobile technology for clients and advisers to engage with the proposition.
We are not going to bury our head in the sand and ignore the mobile revolution. The launch of our digital service Retiready from Aegon offering a simple pension and ISA earlier this year is a clear demonstration of that.
It has revolutionised the way people can access their pension, effectively putting their pension in their pocket. We will consider similar developments for protection when the time is right.
LII: How is Aegon UK addressing the life insurance barriers of price, the perception of complexity and a lack of trust in providers among clients?
DG: If I look at price, we are very clear where we focus our business. We have a pricing strategy in the markets we target. For example, in the 40 plus market, we aim to take a top three position on price. So, we will constantly try to be competitive.
In terms of complexity, I think it is probably fair to say that some products in the protection market, such as critical illness, have evolved to become more complex than they once were. We are trying to ensure that the products are as simple as they can be while also addressing customers’ needs.
Alongside product development, we have got to ensure the marketing is clear about what our target market is, and what the features and benefits are in a language that is easily understood.
Advice is also very important to ensure customers get the cover that best matches their needs and budgets.
Trust is an issue that is absolutely vital and one that the industry has taken very seriously over the past few years. For example, most insurers including Aegon now publish claims statistics so customers and advisers can have more confidence and transparency about how likely it is a claim will be paid.
The issue around trust is determining around what a valid claim is. This is often an emotive issue for people and it is a very difficult time by definition.
It is not just that we pay out whenever the customer believes he or she deserves a payout. You have got to also make sure it is consistent with the terms and conditions of the policy, and that there is a valid and genuine claim.
At the end of the day, we have to treat all customers fairly and it’s important that we take a consistent approach.
We will continue to listen to our customers and to advisers as we look to improve trust in the industry.
LII: How did you get into the protection industry and what is it about your job you really enjoy?
DG: I’ve been in Aegon most of my career. I joined straight from university 16 years ago and I’ve worked in the company’s finance, marketing and sales departments, mainly on the pensions-platform side. I was not 100%-focused on protection until the role of protection director came up in February this year.
It has been a steep learning curve for me, and I have learnt a lot and built a team of experienced people that understand the protection market. We are a strong team.
There are a lot of things I really enjoy about the role. In terms of the protection business, there is a really strong and identifiable sense of purpose in the protection business. Every single policy you sell or add on to the books, you are effectively protecting a family or a business and that’s fulfilling. That is very exciting and I like that.
In terms of the role itself, and looking after the end-to-end protection business, I enjoy being able to take decisions. I like the variety the role gives me in terms of the financial aspect of the business, as well as the distribution, marketing and development side of it. You get a wide variety of challenges and that really excites me. I really love the job I’ve got to say.
Mini biography for Dougy Grant, protection director at Aegon UK
- Dougy Grant is responsible for re-energising the Aegon UK protection business, driving improved customer and shareholder outcomes.
- Grant joined Aegon in 1998 as a graduate in the actuarial Department. Since qualifying as an actuary in 2001, he has since held various senior roles in finance, marketing and sales, including a short spell with Aegon in the USA.
- He also spent time as an associate director at PwC, where he worked on various capital and risk management projects with Global Insurers, before returning to Aegon UK in 2011 as head of finance transformation.
- In 2012 he became retail strategy director where he was responsible for transforming Aegon’s distribution capability, before taking up the role of protection director in February 2014.
