Protection Review 2011


Protection industry ignores Groupon at its peril By Sarah Davidson


Protection providers should be marketing their products on


community-based


websites such as groupon to generate new customers, it has been claimed. Speaking at the Protection


review conference last month michael aldridge, sales director at broker London & country, said discount websites could be the way to generating new protection business for advisers who are increasingly reliant on rebroking existing customers onto new policy deals. groupon


negotiates


discounts usually between 50% and 90% with popular businesses and then direct markets to its database of consumers. the business has seen huge growth in popularity with consumers this year. its website says: “We


send the deals to thousands of subscribers in our free daily email, and we send the businesses a ton of new customers.” aldridge said: “How people


purchase goods is changing. We should be looking at how we sell protection bearing that in mind. i believe groupon could have a place in the financial services world and we ignore it at our peril. “the protection industry


has been accused of lacking innovation and embracing technology on many occasions in the past. But technology need not be a threat if we embrace it. “it’s very much an


opportunity and it could ultimately help us reach out to new audiences, which is


exactly what we need to do to reduce the protection gap. “We need to speak to the


modern consumer in the way they understand and embrace new and innovative ways of purchasing products - community purchasing websites being the fastest growing. “if within the industry we


don’t initiate this we could be caught napping and find an outsider who is more familiar with the modern consumer steal a march on us all.” He said the practicality of


selling protection through a site like groupon would take some careful thought but believes it possible. He added: “How a


protection product might be sold through a site like groupon is of course very much in the detail but when you look at the group protection market and how risk is underwritten it certainly looks more possible. “if the discrimination


argument is taken to its extreme then it accelerates the likelihood of this happening further.” aldridge also said he


believed there was an opportunity for a website like rightmove to aggregate distribution of protection. “i know estate agency


is a different market from protection, but i do think there is a gap in the protection market for this type of business,” he said. “Pre-2000 the estate agency


industry could have been accused of lacking innovation then came along a website by the name of rightmove. only 7 years later 90% of all agents were paying to list their


28 mortgage introducer JULY 2011 Michael Aldridge


products with them despite many agents at the time saying it would never work. “today i believe 85%


of all new house searches start online, facilitated by clever use of technology like rightmove’s app. the question is are we about to see the emergence of our rightmove, are we ready for it, or will we bury our heads in the sand?” Kevin carr, chief executive


of the Protection review, said: “i completely agree with this in theory. the question is what would be sold and how - ie which products, advised or otherwise and at what price. “i’ve used groupon myself


and the point is that you get a significant discount for a short period of time, but in protection this could pose a selection risk. But the industry has to fundamentally change how it deals with customers of the future.” martin tapper, a partner


in colchester-based tapper Financial Services, added: “it seems that this has raised hackles among insurance professionals! excellent. “cheap,


discounted


insurance is not a good reason to buy. How many times have you met clients with totally inappropriate


insurance


that was sold because it was cheap? me – loads.”


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