protection
King of the castle
With a phoney war going on, your clients have to be in a position to protect their castles otherwise there will be casualties
by
James Watson, head of sales and marketing, Paymentshield
The country is currently in the midst of the ‘phoney recession’. It’s an echo of the situation that Britain faced during the ‘phoney war’ in Western Europe between the declaration of war in September 1939 and the spring of 1940. Government warnings are pronounced daily about the severity of the economic situation and we are told to prepare for difficult times ahead... yet, for now, life goes on as normal for most of the population. However, during the ‘phoney war’
there was one exception. Poland was in the process of being occupied and this brutal annexing was a warning of things to come for many European nations. Similarly, the fate of Greece, which has been forced into a series of very tough economic policies to curb its budget deficit, could be the modern day Poland serving as a precursor for the difficulties being experienced in Spain and Ireland.
Unemployment What is certain is that a government inspired blitzkrieg on bureaucracy, with the attendant knock-on effect for the private sector, is set to throw hundreds of thousands on the dole with the number of unemployed expected to breach the three million barrier, matching the worst times of the 80s recession. Paradoxically, this will put added strain on the government departments charged with overseeing social security administration. It’s here, where the government is effectively ‘the insurer of last resort’, that the front-line staff will face a barrage of complaints as they attempt to explain why the meagre amounts of cash available to the sick and unemployed are being further hacked back in an attempt to save money by central government. The ‘phoney recession’ is soon to become very real with very real impacts on large swathes of people. The question is, are we as an industry
prepared to do our bit? Why when things get tough do so many people continue to rely on the State to bail them out when their everyday circumstances change? The very reason that so many do suggests that there is a disconnect between many members of the public
and the wider insurance industry and its raison d’etre.
Ignorance
Lots has been written about financial exclusion and the numbers of the public that are ignorant of the vital economic elements confronted in everyday life such as interest rates and how insurance works. It remains nothing short of a national scandal. When the economy is booming with few people out of work this appears less of a problem. But it is too late discovering the evils of compound interest when you are counting the pennies. This knowledge gap is problem that can only be tackled at a national level. It is at the micro level that we working in financial services can make a difference and the most important piece in this puzzle is the intermediary. It is they that have the all-important face- to-face relationship and can point out the pitfalls of becoming over extended financially or leaving themselves without any significant protection in place should their circumstances change.
cover Naturally, most people’s biggest financial decision is a property purchase. It is
38 mortgage introducer JULY 2010
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