State of the Nation

Hi everyone, this week we have Jeff Woods from Legal & General, talking about their State of the Nation report. Jeff, Roy McLoughlin and I talk through the insights that the report gives into how small businesses are and are not engaging with protection insurance.

We focus on areas of business vulnerability, the need for advice, the impact of covid and how businesses can plan for the future with things like business and group protection.

The key takeaways:

  1. 75% of businesses have not heard about relevant life insurance or executive income protection, and 84% would like to know more about it.
  2. 72% of businesses are willing to spend £50 or more per month on cover and over half are willing to spend over £250 per month, over a quarter willing to spend over £2k per month.
  3. Only 18% of businesses have life insurance in place, to cover the loss of a shareholder.

I am not shy about being quite averse to statistics, I like stories, but the report is really an interesting read and the parts on different conversation starters are a good way to build confidence in approaching these topics. I recommend giving it a look over.

Next time I have Matt Rann back with me and we are going to be talking about alcohol and insurance.

Remember, if you are listening to this as part of your work, you can claim a CPD certificate on our website, thanks to our sponsors Octo Members.

If you want to know more about how to arrange protection insurance, take a look at my Protection Insurance in Practice course here.

Kathryn:       Hi everyone, this is episode nine of season four and today I have Roy McLoughlin with me and Jeff Woods.  Hi!

Jeff:             Morning!

Roy:            Morning!

Kathryn:       So today we’re going to talk about Legal & General’s new State of the Nation Report.  It’s a lot of stuff to do with some fabulous statistics about SMEs and how we’re engaging them, or maybe not engaging them, with protection insurance.  This is the Practical Protection Podcast.  So, Jeff, how are you doing today?

Jeff:             Yeah, I’m very well thank you Kathryn, very good.

Kathryn:       Brilliant, brilliant.  And Roy, are you – are you okay today?

Roy:            Sprightly, there’s a word for you!

Kathryn:       Oooh, I’ve not heard that, but I don’t know if I’ve ever used that word.  I’m going to try and do that thing of like aiming to get that into my conversations today at some point.  It feels like a good word to be saying.  So, just to give a little bit of a background to everybody, what we’re going to be doing is chatting through the research that L&G have done about the State of the Nation.  So, it was a study that was done with 500 small- and medium-sized firms in the UK.  There was a really clear focus upon how protection insurance and SMEs are mixing well and potentially a big opportunity that’s been missed from both the SME side and also from the insurance sector side.

Roy:            Hi Jeff, morning.  How are you?

Jeff:             Yeah, I’m well thanks, Roy.

Roy:            Good, excellent.  Listen, I personally think that this study is a bit of a Bible for advisers.  I actually look forward to it every year and I genuinely mean that because I think part of this is to make people aware of the State of the Nation which is obviously what you called the report.

Jeff:             Yes.

Roy:            I think the other thing about this report is that it gives us some unbelievable statistics which are firstly quite frightening, but secondly actually useful for the advisory community to use when they’re going round talking about small businesses.  So, you know, I think any listeners should definitely have a look at it.  But there’s one that jumped out the page straight away at me and in the research it showed that six in 10 businesses would cease to trade in less than a year if a key person was no longer with the company.  I mean that is shocking and a clear testament to the importance of things like key person.  What are your thoughts on that?

Jeff:             Yeah, you’re absolutely right there Roy, that is shocking.  No look, this is our seventh edition and we brought out the first one in 2009.  What this edition is showing – and actually quite a few of the others, is that 75% of businesses have loans of one sort or another and the level of borrowing of a typical business over the last couple of years has actually increased.  And a lot of it actually has also some form of personal security against it.  And then when we consider that 96% of the six million businesses registered have less than 10 employees and are typically run by just one or two people, who are not just the key to the business but probably are the business, then if something happens to one of them, it’s highly likely without some sort of Plan B that they will fail.

Roy:            Yeah.  Do you think that most people realise – I mean again, this is going to be a podcast of stats Kathryn, but do you think most people realise that it is 96% of businesses that have less than 10 people?  Do you think advisers realise that, Jeff?

Jeff:             No, no I don’t.  I actually think that those that aren’t involved in business protection are slightly fearful, because they think they’re going to be going in and talking to some sort of blue chip company which it absolutely isn’t.  You know, it’s the guys on the business parks and the industrial estates, it’s those types of businesses now that make up the majority of the businesses in the UK.  And because they only have typically 10 employees, you know, one or two or three of them will be absolutely key to that business – the reason it runs.  And that’s why it’s so important that more advisers go in and talk to these small businesses because they need the advice.

Roy:            And I think that’s probably our first takeaway of this podcast – the smaller the company, the more reliance you have on a smaller amount of people, because if those people are taken out of that company, that company will have bigger problems than a bigger company, where they’ve probably got the resource to replace that person.

Jeff:             Yeah absolutely, you know, you look at something – I work for L&G, right?  If something happens to someone at L&G we’re all going to be pretty sad about it, but it’s not really going to impact the business.  But if something happened to a small business that is literally three or four people, of course it’s going to have a massive impact.

Roy:            And just something else that you said there, do you think there’s also a view amongst certain advisers that this is too complicated because there is that and we said this – misapprehension that we’re all chasing these big blue-chip companies that you referred to?

Jeff:             Um, maybe yes.  I think it’s a lot of things, isn’t it?  It’s how do you get into it?  How do you speak to the business?  How do you approach them?  What do you say?  And so I think it’s just that not knowing.  And most of our advisers are now either mortgage brokers or they might be in pension and wealth and they’re busy doing what they’re doing because there aren’t that many advisers for the size of our population and they are busy.  And so to actually focus on doing something different is quite difficult.  And I think when you have the perception of, ‘Well, how do I even approach that business and what do I say?’ it’s very difficult.  I just think that’s why not so many get involved.

Kathryn:       So I think what was interesting, sort of like looking at the report as well, I know we’ve just been talking about, you know, key person cover, we’re talking quite a lot about the business vulnerability and it was that a lot of the statistics really stood out for me and what I liked about the report – and I’ve never been shy about this, is that I’m not somebody who really likes statistics.  I get a bit fed up seeing numbers.  I kind of – I want to know the richness behind the data.  But with the report, I actually found it really easy to follow and to read through and to see those key bits.  And I think, you know, I’d say on the business vulnerability side of things, it was showing that about 75% of the businesses had a loan that would actually be really hard for them to address if a key person was gone.  Many of them, again, about 75%, hadn’t even heard of things like executive income protection, but even more interesting than that, 84% of them said that they were actually really keen and eager to hear about it.  I’m wondering if that’s possibly a bit of a knock-on from this last year or something, where I imagine especially with smaller firms, if there’s been somebody who’s not been well or unfortunately they’ve maybe lost somebody, it’s probably had a really big impact, everything that’s happened since well, 2020 and 2021.

Jeff:             Yeah, sure.  Do you know, I think whether you’re in business protection or personal protection, if someone’s had an event i.e., you know, someone close to them or themselves have been seriously ill or someone has died that they know for example, they are obviously very open to talking about and doing something about the need they have for some sort of protection.  And I think over the last 18 months we’ve all been through an event.  So we’re all in that place.  And businesses aren’t any different.  But they’re probably enhanced because they’ve actually not been able to operate in the normal way, you know, people have had to go and work remote or they’ve had to put a lot on furlough and I think naturally that would have made them feel more vulnerable.  But often they don’t know what the options are because they’re not talking to anyone about it.

So if you prompt them or suggest anything which is the point I suppose, if you say, ‘Have you heard of relevant life or exec IP?’ then I think most of them are going to say, ‘Well I haven’t, but I’d really like to know more if that’s going to help me,’ and I think that’s because we all feel – and businesses in particular, just more vulnerable.  And that comes back to the point of just talk to people because if you talk to them and let them know what they can do, they probably are more open to it than they ever have been.

Kathryn:       Absolutely.  I think as well, sort of like before we move onto the next little bit, it was interesting as well and quite – I think a bit worrying as well that, you know, that obviously it was about 54%, so I think – so well over 250 of the companies that responded had given personal security for business borrowing.  And again, if there’s not some kind of protection in place for that which, you know, essentially, it’s – it is going to be things like these protection insurances, that’s a huge risk.  And not just a business risk but obviously that knock-on effect to potentially their personal wealth as well and their homes and obviously then a knock-on effect to their families.

Jeff:             Well can you imagine, you’re ill, your business fails and then you potentially lose your home?  That’s not – really not a very good sequence of events, is it?

Kathryn:       It’s just unthinkable.

Jeff:             I mean what that indicates obviously is that there’s a lot of – and you do find there’s a lot of small businesses that have directors’ loans.  And directors loans are often, you know, the way of either bypassing a bank or dealing with the fact that the bank won’t give you borrowing.  And of course that might have been accentuated despite CIBLs and things like that over this period of time.  And a director’s loan has to be repaid.  And in the event of something happening to somebody, this could be, you know, this could have a property against it or all sorts of different things against it.  And I think that’s, you know, another stat that jumps out of the page and tells the adviser that we should be covering director’s loans in exactly the same way that you cover a mortgage.  And I think first callout for signposting of the podcast – but if you’re a mortgage broker in particular listening to this, it’s the same principle.  You’re covering a loan for a mortgage, so that if someone dies or has a long-term illness, that the mortgage is paid off.  Well, what’s the difference between that and a director’s loan, is a question I would pose?

Kathryn:       Absolutely.  And I think just going back, you know, a little bit to what you were saying there Jeff, about chatting to people.  One of the things that the report tends to pick up as well is that we’re still not necessarily as an industry being seen as the go to place for these kinds of insurances, which just feels so bizarre because obviously the insurance world has been around for such a long time but when we were looking through the research it showed that about 30% of the people that responded would speak to their accountant about these kinds of things.  And 28% would go to an adviser, so it is kind of obviously – it’s near equal but really when we talk about insurances we should be sort of I think seeing – well hopefully we’ll be seeing much, much higher things than that.  And we also still found as well that 46% of the people that responded didn’t see any need for business protection at all.  I mean, what’s your instinct Jeff?  Why are people going more towards their accountants than they are to advisers?

Jeff:             I suppose if they haven’t got an adviser, someone they know, then their trusted professional source is now their accountant.  Because it’s pretty almost pointless speaking to the bank because the bank will do very little about it now.  I think it’s encouraging that actually 54% will go and speak to a professional adviser.  Frustrating I guess, that more of them don’t actually think from the point of view of protection to go and seek out an actual financial adviser.  But for me, actually in some ways it says, “Look, as an adviser, if you want to be in this business then actually your clear point of contact should be an accountant.”  And I think we’ll all know that many accountants aren’t that aware of what the solutions are and what the actual risks are.  They just don’t.  I mean, they need educating as much as the businesses do.

If you go and speak to the accountants, then you can see that you would open up a really good business opportunity.  Because if businesses are speaking to their accountant and the accountant is more educated to the – to what the risks and the solutions are, then there’s great opportunity there.  And as for, you know, businesses not actually showing any interest, is that any different from anybody else?  Mostly, they don’t know what they don’t know.  Or they believe that the insurance is maybe four times what it actually is.  And so I think it just comes back to that need for advice and us being proactive as an industry to go and talk to them and make them more aware of what those risks are, but also what the solutions are.  And actually, really, what a small percentage of their business turnover that would be.

Jeff:             I’m not surprised at that stat actually about people going to their accountants, because if you think about the route to market, there aren’t enough of us and there’s certainly not enough of us that go out, you know, peddling our business protection wares and I actually look at a stat like that and think of it as a positive.  Because let’s face it, when you’re doing key person and shareholder protection, you should be talking to that person’s accountant anyway.  There are issues about valuations.  There might be issues about cross option agreements.  There are all sorts of different things where it’s important you work alongside that person’s accountant.  And I think what this does is, is that it shows us once again that we have to collaborate with our sister professions, which for me are accountancy and legal.

And therefore, this is a wonderful opportunity actually for our listeners to think about the accountants that might be in their local towns, cities, villages, wherever they live and go and talk to them in the first instance, about how this might affect their companies.  And an angle that was pointed out to me a while back was, it’s in an accountant’s interest to have its clients insured as well.  And the reason for that is that accountants are mainly transactional.  Yeah?  And therefore they earn their wares, their monies, their revenue streams on doing pieces of business for companies.  If those companies are no longer around because of all the things that we’ve just talked about, actually that doesn’t help the accountancy firm either.  And I think if you can go in from that angle to a certain extent with some accountants and say, “This is effectively you protecting your clients against your own revenue book,” what I’ve certainly found is a very receptive audience.

Kathryn:       I think – sorry going back as well a little bit to just what you were saying before Jeff, about people – what was it, sorry I’ve lost my train of thought there a little bit, about the expecting that the insurances are going to cost a lot more.  And I think this kind of goes to what you often say as well Roy, about the average cost of income protection.

Roy:            A pound a day, a pound a day

Kathryn:       I know, it’s a pound a day, Roy, for an income protection policy.  But, you know, obviously, the report showed that many people think that the cost of insurance is about four times what it is and for things like income protection, they expect it to be about 50% more –

Roy:            Yes.

Kathryn:       Than what the actual cost would be.  But then, on the opposite side of that, which I found really surprising, is just how much people seem to say that they are – they’re willing to potentially spend on these insurances.  There was about 72% were willing to spend about £50 or more, over half were saying that they could actually potentially go over, you know, sort of like up to or over £750 per month and a quarter of them were potentially saying over £2,000 per month.  I mean, that’s quite a disparity really isn’t it?  Because you kind of think, well hang on a minute, a lot of people may be unsure of the cost, they probably think it’s too expensive, but then a quarter of them were thinking it could be about £2,000 a month.  So and if they’re expecting it to be, I don’t know, potentially even more than that, then that’s – we’re really not sort of like getting over the pricing.  It’s probably that we need to, I don’t know, do we need to get some like really good case studies out there of the costings?

Jeff:             Yes, possibly.  I suppose your perception of what something might cost will depend on the size of your business and your turnover and what you’re having to pay out for other things.  And because there are quite a few small businesses, I mean, I think until they actually see what the costs are, as you say, so good case studies I suppose that could be used just to make them more aware of what it might cost.  I think the important thing I get from that is they are – they accept they would need to spend money.  And then I think if you do a good job of making them really aware of what their needs are, just the same as any other protection conversation, so long as you can fit within a sensible budget, they will spend what they need to spend in order to have a solution to overcome that need and that risk.  So I think it’s positive that so many say they will spend money and it doesn’t surprise me that they had no idea how much it would cost though.

Roy:            Yeah, I mean one of the issues undoubtedly here is general insurance, so companies will have to take out certain forms of general insurance, as we all know, so certain indemnity insurances, employers’ public liability insurances, D&O insurances, etc.  You know, if they’ve got cars, they’ll have to be insured, if they’ve got offices, if they’ve got computers and I think there is a feeling that particularly with Covid, that some of these insurance costs have gone up due to, you know, business interruption claims and we’ve got to stop thinking that insurance is a different word.  You know, a lot of these small businesses will see general and life as the same insurance, i.e. the principle is the same and I think we need to sort of again break down these silos and just realise that we are part of that whole solution.  So if somebody is insuring their computers, they should be insuring their people.  If someone’s insuring their fleet of cars, they should be, you know, thinking about long-term sick pay, etc., etc..  Let’s actually throw these things into the same melting pot, because I think then, once you sell that concept of, you know, actually the person’s probably more important than the computer by the way then, you know, again I think you’re going to find more open doors than you might expect.

Kathryn:       I imagine this is a bit like that social issue in general though isn’t it?  It’s like the amount of people who take out pet insurance rather than taking out income protection for themselves.  We forget about the fact that we essentially are the machine that makes the money.

Roy:            Correct.

Kathryn:       And it’s just trying to get people to have that mindset.  But, you know, again with the report, I think it was something like 94% of the businesses said that they had a key person.  And I imagine obviously for a small business that is often usually the – sort of like the company owner.  But again, it’s sort of a case of well so many of them haven’t even heard about this kind of policy.  Like I think what you were saying Roy, if people are really looking at their accountants maybe there is sort of like a real need for advisers to sort of like really try and engage with maybe even local accountancy firms to them.  And just like some people engage with estate agents to obviously make sure that, you know, protection insurance is being put in place for mortgages.  But to really sort of like speak to them and say, “Look, do you know that we’re here?” you know, in a sense.  “We can do this and we can help and we can help and we can step in,” and again potentially even, you could set up some kind of signposting agreements with people sort of like that aren’t necessarily within our industry.

Jeff:             100% and the other area – and it’s definitely worked for us at Cavendish Ware – I think you do it as well Kathryn, is general insurance brokers.  So, you know, your general insurance broker and again just to re-emphasise people have to have general insurance, yeah?  Remember it’s the law.  Stuff like Public Liability.  Your general insurance broker particularly with the, you know, it’s a local sort of business, go and talk to them.  Because remember they have got lines of demarcation as well and most general insurance brokers do not have permissions to come over to our side of the fence.  So I think that we certainly work with some general insurance brokers where they would do the general insurance side and then they will signpost – there you go, second mention of the morning – into us for these sort of things and vice versa.

And remember that if you’re looking after small businesses, or you’re seeking out small businesses, they will need general insurance because it is the law on certain subjects.  The ability to have a general insurance broker that you can refer to, if you don’t do it internally, means that signposting will work that way as well.  So I think it’s just again, thinking outside the box here and just having a bit of commercial nouse about how you could potentially open up doors with the businesses around the business if that makes sense.

Kathryn:       Absolutely.

Jeff:             Yes I think, you know, we’ve done this research obviously which is really useful and I think it’s useful whether you’re looking to get into business protection or whether you are experienced as you are Roy, but I think, you know, you wonder whether we should extend it slightly to include something about the way to look to generate business.  So, you’re both well experienced at doing that and we wonder whether we should have something additional that says do these things, speak to these people, this is your approach, these are your opportunities.  Because I think we do a bit of that through this report but we don’t do that as much.  And we run webinars where we try and give people ideas about how they can enter the market and what they can do.  But actually, taking some of your experience could be really useful.

Roy:            Yeah, and going back to your case study point Kathryn, a big shout out for Legal & General, because during their training they still regularly bring in the 7Families campaign and I’ve said from day one, as you both know, that the 7Families is about corporate as much as it is individual because the stories and the principles are just the same so, you know, by all means people go back and use 7Families just to repeat there’s no intellectual property, you can use any of the videos that we have, the link’s on Kathryn’s site somewhere or we can put the link up again.  That can be used for business as much as an individual, you know, situation.

So Jeff, I wanted to ask you about the dreaded Covid word if that’s okay for a minute?  Look, it’s changed our lives in so many ways and, you know, very negative connotations but actually if you excuse the pun, some positivity has come out of this as well.  What’s the positive messages that we’ve learnt from Covid in particular with business protection do you think?

Jeff:             Well I think, you know, we touched on it earlier and it is the vulnerability maybe that businesses feel.  And I don’t think, you know, anyone should be thinking that we’re taking advantage of a situation.  I think it just spells out that everybody’s felt more vulnerable.  And a business in particular, where they’ve had to furlough staff or they’ve had to work from home and they’ve had to change the way that they work.  And they might, after short periods of time, see their revenue almost come to a standstill.  But then they’ve been resilient and found a way through it to keep that going.  I think it’s that awareness of that situation.  As an adviser, go and speak to people because they are open to it and they are feeling vulnerable because they’ve had to go through that journey and they will be thinking, “Well, what if I couldn’t have put someone on furlough?  What if something had happened to me, what would happen to my business?”  It’s just never been a better time to go and open up those conversations.  Never been a greater need for advice in fact with small businesses to just embrace it and go and talk to people, is what I would say.

Roy:            What about the indestructibility side of it as well?  Do you think there’s a sense that, you know, there are business owners as well as individuals who before Covid would sort of shrug their shoulders and go, “That’s all very well Mr Adviser, but I don’t think it’s going to happen to me.”  Do you think that’s changed – there’s been a sea change of that, which can be used in this context as well?

Jeff:             Yes.  Because I think we all realise that actually it could happen to us and maybe it has happened to us or someone close to us to one degree or another.  And that’s that point about the vulnerability, you know, we all feel that more don’t we?  You know, I think we’ve been starting to go back out and seeing people face to face, we’ve been going to industry events and I’ve got to say, three or four days after I’ve been to one of those events, I’m doing a test because I’m thinking, you know, “Have I managed to pick up Covid during that time?” and you worry about it and you think about it.  And so I think that, you know, as I say, it’s no different for a business but I think it’s enhanced for a business.  There can’t be many there sitting thinking, “Well it won’t impact me.”

Kathryn:       Absolutely.  And I know exactly what you mean in terms of like being a bit cautious going to things.  I know Alan – obviously he went down to London and managed to see you all last week.

Roy:            Yeah, we had a boogie round our handbags last Thursday night.

Kathryn:       You did, you did, I heard all about it.  No video evidence though, unfortunately.  But yeah he – for a good while he was really umming and ah-ing until probably about the day beforehand about whether or not to get the train or not or to drive down.  And he just really couldn’t sort of like, you know, like you said, that bit of vulnerability of thinking well, “Who am I going to be on the train with?  What am I going to –?”  And then like you said, then probably the other side of things, you know, obviously when you all saw each other, it was something like three or four hundred people probably in a room together and you think, “Well actually, the train’s probably nothing compared to us all being in here together,” kind of thing.

But again though, I think like you said, it has sort of like made us all aware and I think that again showed in the statistics when it was something like 34% of the businesses were actually quite keen now at looking at stuff like the Group IP.  I think – I know we all sort of like – I think we all do that thing, don’t we, where we sort of say, oh as a teenager you sort of like feel that you’re invulnerable and you’ll live forever and there’s no kind of worries and that’s why I think a lot of people say, “Oh well, young people don’t necessarily want insurance, because why do they need it?  They’re gonna – they’re never gonna – nothings ever going to happen to them, ever.”

But then the fact that people who are in their 30s, 40s, 50s, still don’t have things like income protection, or the group cover, it does still kind of indicate that a lot of us still think that we’re indestructible.  We’re sort of like, we’re not kind of really – obviously so many of us hear all those statistics, like I think it’s now – it’s one in two people have cancer at some point in their life and there’s so many other ones as well.  The amount of people who are diagnosed every day with Parkinson’s is much higher than I think a lot of people would realise.  And yet we see all this stuff but yet we still don’t have, you know, we’re still at a point where not everybody has things like the income protection in place.

Roy:            I think the group point is a really valid one and that’s fascinating that 34% say they’re keen to look into it.  You know, the question straight away is, “Well how many advisers are out there going out and searching out that market,” because that’s one in three companies obviously.

Jeff:             Yeah, do you know, I think where businesses have had to furlough staff – I think most businesses, as I’m sure you both do, you know, really care for their people and take responsibility for the people that you employ and work with.  And you do wonder whether that’s made them think more now, well what would they do if they couldn’t work, but in a different situation, you know, how would they cope?  And so thinking about group IP or group cover which is a relatively cheap but a good value way of getting wide cover, maybe it is – maybe there is an element of that.

Roy:            Well it’s actually cheaper than people think.  I mean, it’s normally less that 1% of payroll so again sometimes, you know, internally we think these things are more expensive than they are.  I mean, I have to say, death in service – and Kathryn and I both advise on this, when you show the premiums to clients, you often get, “Is that, is that per month?” and you go, “No, that’s for the year,” and they’re – “What?  Why’s that so cheap?” you know.  So Ron Wheatcroft mentions this all the time, you know, I think, you know, for those of you listening in who don’t do group, it’s something worth looking at or again – signposting number three – we should do signpost bingo, shouldn’t we Kathryn?

Kathryn:       I was going to say we should have like a little swear jar somewhere, I mean a money drops sign, where it’s a signpost drop.

Roy:            It’s not swearing signposting, come on.

Kathryn:       No, no.

Roy:            But I think, you know, that it’s worth knowing a bit about group because actually group – and Legal & General let’s face it, do both, don’t they Jeff?

Jeff:             Yes.

Roy:            Group and key person actually are the same principle and complement each other.

Jeff:             Yeah, absolutely and do you know, it’s something we’ve been talking about internally as how we work together a bit better to try and promote both products out at the same time.  So, because a lot of advisers who are in the sort of group world, don’t actually do much in the individual side.  And those on the individual, even business protection, often don’t think about group that much.  And it is really important that they are – that you work both together.

Roy:            Yeah, some of the best signposting I’ve seen in 2021, I have to say is from group benefits advisers to individuals.  And I think that, you know, again, some group people will be listening to this, but there will certainly be some individual people listening to this, go and seek out the employee benefits guys because they don’t all do the individual.  And the synergies are for me, you know, just staring at you in the face.  But if you’re siloed into a, “Well I’m only going to do that,” maybe there are opportunities there.  So, as in – don’t assume that the employee benefits consultants always do individual guys.

Kathryn:       Absolutely.  I think obviously again, sort of – I’m going back slightly to some of the statistics that really sort of like stood out for me and probably surprised me in terms of like these borrowings and the vulnerability and things, you know, we had as well in there that roughly the average borrowing during Covid for a business was £122,000 and almost a fifth had borrowed over £250,000 and it’s sort of like, it’s sticking with me, the whole thing of people putting up a lot of their personal assets as kind of like – is it collateral, probably for it, is that the right word?

Roy:            Yeah, collateral, Yeah.

Kathryn:       I just suddenly got myself a bit paranoid then I was using the wrong word.  But, you know, with the whole planning for the future, you know, when we’re looking forward to try and encourage companies to listen to us, to what protection can offer and I know that it’s probably this age-old story, isn’t it?  Or this age old thing of a saying, you know, how can we get people to listen to us more? You know, we usually say it a lot in the personal space but now with the businesses, what can we do Jeff, to really start getting this conversation going?  And not just from advisers but, you know, where should we be going, who should we be trying to contact to sort of like really try and engage with businesses?

Jeff:             Well, I think firstly, you know, within our research document, what we’ve tried to do is rather than just say, “Here’s the output from the research, here’s the interesting – obviously very interesting stats,” what we’ve wanted to try and do is say, “Well this is how you can use it.”  And so we’ve got a variety of conversation starters that work their way through, it’s almost like a so what.  Well actually, this is what you can do with it and this is how you can have a conversation around it.  And I actually think that although someone like Roy, you know, with his experience or even yourself Kathryn, would just pick it up and use it to target conversations with accountants and business owners alike.  If you’re not so experienced or you’re new to business protection then actually the research will still give you not only a great introduction to business protection but also show you how to approach businesses and what to say.

But that’s also the same for approaching accountants.  It’s not necessarily just accountants.  Maybe it’s actually going to your local business lunches or business groups or Federations of Small Businesses, that type of thing.  If you look in your local town or your local area there will be a variety of networking-type clubs that businesspeople will go to.  And often that gives you great opportunity just to go in and talk and to network and get to know people.  And actually trying to educate them a little bit about what you can do.  And the research document does have these conversation starters and it will really help you to think about what to say and then you’ll go in with some credibility with those business owners or accountants and alike.

Roy:            I think the other thing there is that you get an immediate level of respect because you’re going in with the facts and these are facts that most of these people won’t understand, particularly some of the introducers.  And I’d also encourage the use of social media here.  You know, I suspect it’s okay to share any of your particular slides isn’t it, Jeff?  I hope so because as you see, I have been.  But –

Jeff:             Yes it is.

Roy:            You know, I think sometimes, you know, using some of these stats and putting them out in the public domain on things like LinkedIn will actually get you some commentary and I think if you are the person that is the expert on this field and this State of the Nation Report enables you to become an expert, then don’t be concerned that you’re going in to see a big accountant or a big lawyer or someone who you think, you know, is going to be more established than you.  Actually I think you’ll find they’ll be very, very keen to understand some of these situations for some of the reasons we’ve alluded to earlier.

Jeff:             Yeah.

Roy:            Plus, accountants and lawyers in particular all signpost themselves as we know, okay?  So they will signpost internally okay, but also externally.  And I think if you can become – and I like that idea of business clubs, I’ve seen several IFAs that do it in a very successful way, you become that expert in that business club on business protection.  Your name and your referral structure will arguably spread like wildfire.

Jeff:             Yes, I’d agree.

Kathryn:       Oh absolutely, it really does.  On social media, it’s an incredible thing.  It’s one of those things that social media is a bit of a – it can be a wonderful place and also a negative place, but if you do find a really good sort of business club – there’s a number of them on Facebook – there’s quite a few business communities on there and if you do sort of like just go in, have a look, sort of like maybe watch it for a couple of days, see who’s saying what and different things, but I tend to find a lot of the time for me, when I’m looking at these things as well, is that there’s a lot of people in them who tend to be quite a lot of maybe wealth or pension folk –

Roy:            Mm, correct, Yeah.

Kathryn:       And obviously absolutely not my area.  But then sometimes there’ll be the odd thing or where someone will say, “Ooh right well, I’m looking at this –” and obviously it’s not necessarily their key area, but it’s mine so I can easily step in and say, “Oh, you know, actually this is what we can do here,” and, you know, I just kind of monitor from the sides in a sense and just come in whenever I feel it’s useful.  And it has, you know, it can take a while, but it does come to a point where somebody will suddenly start tagging you and saying, “Oh, I remember, you know, Kathryn said something about this the other day, what’s your thoughts this time, Kathryn?”  And it’s just a really nice way to meet more people, as you say, Roy.  I shall say it now, it’s a good way of sort of like building everything for signposting and chatting to different people.  But, you know, I really liked the idea in the report as well Jeff, when it was all these conversation starter sections, that you have for different situations –

Jeff:             Mm-hm.

Kathryn:       I think that kind of really sort of like hit home the different ways of potentially different contexts and different approaches to take.  And I think with everybody as well – I think if somebody is starting to go into this space a little bit, I kind of think, you know, somebody might be a little bit nervous and sort of thinking, “I’m a little bit out of my depth here.”  I think they’re probably either going to be nervous or incredibly confident.  I’d probably feel a bit more comfortable with somebody who feels a bit nervous sort of like wondering how it was going to go.  But it’s just like with anything like when people first started out in advice or when they first started doing that new area that they were starting to advise on, the first couple of times it might feel a little bit strange, you might not get it done perfectly right but it always comes down to practice.

Jeff:             Yes, yeah it does.

Roy:            Yeah, the nerves.  Let me tell you, the nerves never end Kathryn.  I mean I’ve been doing it for donkey’s years and I still get nervous.  But, you know, there’s a good thing about nerves as well because it shows a certain level of humility and non-arrogance.  So, all I would say to people that are thinking about doing this is firstly, what have you got to lose?  Secondly, this is a huge opportunity.  And thirdly, if you’re not doing it, who else is, okay?  And what we can tell you is – and it is very evident from this report, that there’s simply not enough of us out there, i.e. there is no competition.  So don’t think, “Oh, somebody else in my area’s already doing this.  Oh I bet there’s someone doing this already.”  You know, those sort of things.  If you look at Ron Wheatcroft’s Swiss Re Health & Term Report every year, you’ll see the amount of business protection is far too low and you’re therefore in a sort of a unique situation in that you don’t really have oodles of competition.  So I think if this is an area that you’re thinking of going into, why not try it?  And this sort of report can be your, you know, part of your armoury.

Jeff:             Yeah, absolutely and, you know, I think it’s about taking one step at a time, isn’t it?  And I know when I first got involved, many years ago now, in business protection, my manager at the time said, “Right, just go out, talk to the business, do your fact find, find out about them, just find out stuff and then come back, sit down and we’ll go through it and work out probably what we want to do, then you go back and present the solution.”  So, you don’t have to know it all in one go, you know, you can just do it step by step, go away and then go back.  No one expects you to know everything straight away.  So certainly don’t be afraid of taking those first ones.

Roy:            I completely agree with that and there are some wonderful insurance companies, L&G of course, but others, we have to say Jeff, who give some excellent training so –

Jeff:             Yeah, they do.

Roy:            You know, if you are concerned about this, go and talk to your local broker or consultant from the various business protection insurance specialists and go on a course.  And on that course, they’ll give you wonderful facts such as we talked about today but they will give you some of that sales training which, as Jeff alludes to, is definitely needed as well.  But I think, you know, it’s a bit like the riding of the bike, isn’t it?  Once you’ve done it a few times, you’ll find it’s not a lot of difference to your basic protection – individual protection advice, because and Kevin Carr regularly says this, “It’s the same product, there is no difference in the product.”  Yet there are things like cross-option agreements and there are a few vagaries like that, forget about those for the moment, the product is the same.  You’re already selling it to your individual clients.

Jeff:             Yeah absolutely and do you know, if you’re not sure about some of the technical stuff, even my – a couple of my market development managers that go and do all our webinars and courses, they’re really experienced with this and technically really know their stuff and we often get advisers who will call them and go, “Ooh, how should I structure this?  What’s the best way of doing it?”  There’s always someone, it’s not just us, lots of the other providers have got some excellent account managers who really know their stuff so as Roy says, just go and speak to people.  They’ll only be too happy to help.

Kathryn:       I think when we were chatting the other day Jeff, sort of like as we were preparing for this, something that stood out for me that I felt was really good and again, I’m sure other insurers do it as well, but it was obviously we were specifically talking about you and your role and L&G, is that when people do come to you and when they are wanting to see this kind of – sort of like get a bit of training in this kind of area, it’s not going to be sort of the, you know, sort of – it’s not going to be what a lot of training which is, you know, sort of like, “Oh this is our training, this is L&G and this is what our product does,” in a sense, it’s a case of this is unbranded, this is just simply how key person works.  This is how exec IP works and it’s more sort of like the, you know, it’s just general market education and bettering the market as a whole, because the last thing we want as well is for anything – anybody to try and sort of like advise and not to fully understand the product. So where can people – if somebody does want to have this and they just want to go, “You know what, I just want training on this and just to understand the fundamentals,” how would they kind of engage that with your guys?

Jeff:             Well look, on the L&G website under the Protection area, there are – there is a section on webinars and workshops and we have three or four different workshops which we look at for business protection so we have an introduction to business protection.  We have a key person, we have a shareholder webinar, we have an understanding accounts webinar.  And as you said Kathryn, you know, we don’t talk L&G at all, it’s purely generic knowledge and skill based to help you do your – do your job.  We work on the basis that, you know, L&G will get their fair share if people start to write protection so we don’t do it.  We’re CII accredited and you can’t be CII accredited if you’re doing a product push.  So we don’t do it.  And we’re just going through the sign-up again this year to make sure we keep that accreditation.

So, you know that you’re just going to get good, proper generic sales skills and technical knowledge to help you do the job in an area. So they’re good if you’re coming into it and they’re good if you just need a bit of a refresher on one particular area.

Kathryn:       Good.  I was going to say, one that I have definitely had this kind of an experience as well.  I was doing – well I’ve been doing quite a bit of sort of shareholder and group protection for a company in the shareholder side of things.  I suddenly had this thing where somebody’s sort of like tax adviser, was saying that what I was saying was wrong.  And I did that automatic thing of thinking, “Oh Lord, I’ve got it wrong, oh what have I done, what have I done?” kind of thing and automatically just assumed that I’d done something wrong.  And I spoke to the insurer that I was using.  I spoke to their taxation specialist and I have to say, I couldn’t have found any better source of support or information at all.  They were – well obviously very happily for me, they said that I was absolutely right and the tax adviser was wrong, which was obviously a good thing but, you know, straight away they were saying, you know, “If you need us to, we can always get in, you know, we’ll get on the call with the client, with the tax adviser, we’ll put them straight in a sense as to how it all works.”

So, you know, they really are absolutely, you know, amazing and really good and their technical knowledge is phenomenal when you speak to the business specialists, you know, that are really into it –

Jeff:             Yes.

Kathryn:       In the sort of like, the technical departments and so I’m very in awe of the way that their knowledge is, but yeah, definitely recommend that people, you know, sort of don’t just sort of look at it and think, “Oh, I kind of understand,” and then wander off and start doing it a bit, you know, do engage, do do the training.  And, you know, the people in the insurance companies are there to support and they do genuinely want to support people as well.  I think whenever I speak to people in this kind of area, they’re just so eager to sort of like – to chat and be helpful.  It’s wonderful actually.

Jeff:             Yes, I think that’s –

Roy:            I think the other – I was going to say the other opportunity that you reminded me of there Kathryn, is that there is an added advantage of business protection compared to individual.  With individual – and I hope all our listeners review on a regular basis, but generally sum assureds would go up but slowly over time because you might be covering a mortgage or whatever the case may be.  But business protection, the sum assureds go up much quicker because on the basis that most businesses expand over a period of time, what of course you find is that when you’re doing your reviews and it’s really important guys that you do your reviews on a regular basis, that actually you’ll get to the situation where the protection that you set up might suddenly become inadequate or a new key person has joined or the business is just simply bigger than it was before and the valuations for shareholder protection need increasing.  So it’s not a one-off piece of advice this, actually it’s part of the protection suite of benefits where I – my experience is that the sum assureds go up, which ultimately are greater revenues for you as well, so, you know, don’t forget that point.

Kathryn:       Absolutely.  Well I think we’re close to the end of the podcast then.  I don’t know if either of you want to leave anybody with any final pearls of wisdom at all?

Jeff:             Only from my point, that –

Kathryn:       Really awkward if neither of you do.

Jeff:             Have a look at the research, have a look at our website and what we can offer to help you do, speak to other providers.  Hey, I mean, do you know, there are plenty of really, really good resources out there and have a go.  Go and talk to some businesses, talk to some accountants.  It really is a great opportunity from a business perspective.

Roy:            Yeah, I would thoroughly endorse everything that Jeff’s just said.  Have a go, you know, dip your toe in the water, go out, talk to some people.  Go armed with, you know, this – I mean I personally get, you know, take a hard copy of some of the slides with me.  Go armed out with these and just test the water.  I would be very surprised if any of you get any pushback.  And I think that people that I know and have started down the business protection road over the last few years, very rarely look back actually.  What they tend to say is, “I wish I’d done this a few years ago.”  So, you know, I think the final thing I would say is, the most alarming stat that jumps out of all of this is the size of the market, guys.  And that means that, you know, there is no real competition.  There’s, you know, there’s lots to go round and I think our great industry has got a little bit of a responsibility here.  I think if we leave, you know, what’s it guesstimated to be, £2.5 million employers and we don’t go and talk to them, well then we’re not doing the right thing either so, you know, I would say, lots of opportunity, get the training.  You know, download these stats and other stats and go out and try it.  I’d be very surprised if you turn round and say, “I think this was a bad idea.”

Kathryn:       Fantastic.  And that’s a good thing to potentially end on.  Well thank you both obviously so much for coming and chatting about this report.  There was a lot more statistics than I usually go through and everything, so I may go and have a cuppa just to recover, but no, I think it was a – it was really good to see those numbers, because they do say absolutely a lot.  So, as I say, thank you both very, very much.

Jeff:             No, thank you, Kathryn.

Roy:            Thanks very much.

Kathryn:       Absolutely.  Well next time I’m going to be back with Matt Rann and we’re going to be chatting about some underwriting of some sort.  I have to say, for the first time in a long time, I’m not completely sure what we’re going to be chatting about next time, so I’ll have to just leave it as a mystery for everybody.  But if anybody would like a reminder of the next episode, please do drop us a message on social media or visit the website practical-protection.co.uk.  And don’t forget that if you’ve listened to this as part of your work, you can claim a CPD certificate on the website too, thanks to our sponsors, OctoMembers.  Thank you both again, speak to you soon.

Jeff:             Thank you, bye.

Roy:            Bye bye.

State of the Nation

Hi everyone, this week we have Jeff Woods from Legal & General, talking about their State of the Nation report. Jeff, Roy McLoughlin and I talk through the insights that the report gives into how small businesses are and are not engaging with protection insurance.

We focus on areas of business vulnerability, the need for advice, the impact of covid and how businesses can plan for the future with things like business and group protection.

The key takeaways:

  1. 75% of businesses have not heard about relevant life insurance or executive income protection, and 84% would like to know more about it.
  2. 72% of businesses are willing to spend £50 or more per month on cover and over half are willing to spend over £250 per month, over a quarter willing to spend over £2k per month.
  3. Only 18% of businesses have life insurance in place, to cover the loss of a shareholder.

I am not shy about being quite averse to statistics, I like stories, but the report is really an interesting read and the parts on different conversation starters are a good way to build confidence in approaching these topics. I recommend giving it a look over.

Next time I have Matt Rann back with me and we are going to be talking about alcohol and insurance.

Remember, if you are listening to this as part of your work, you can claim a CPD certificate on our website, thanks to our sponsors Octo Members.

If you want to know more about how to arrange protection insurance, take a look at my Protection Insurance in Practice course here.

Kathryn:       Hi everyone, this is episode nine of season four and today I have Roy McLoughlin with me and Jeff Woods.  Hi!

Jeff:             Morning!

Roy:            Morning!

Kathryn:       So today we’re going to talk about Legal & General’s new State of the Nation Report.  It’s a lot of stuff to do with some fabulous statistics about SMEs and how we’re engaging them, or maybe not engaging them, with protection insurance.  This is the Practical Protection Podcast.  So, Jeff, how are you doing today?

Jeff:             Yeah, I’m very well thank you Kathryn, very good.

Kathryn:       Brilliant, brilliant.  And Roy, are you – are you okay today?

Roy:            Sprightly, there’s a word for you!

Kathryn:       Oooh, I’ve not heard that, but I don’t know if I’ve ever used that word.  I’m going to try and do that thing of like aiming to get that into my conversations today at some point.  It feels like a good word to be saying.  So, just to give a little bit of a background to everybody, what we’re going to be doing is chatting through the research that L&G have done about the State of the Nation.  So, it was a study that was done with 500 small- and medium-sized firms in the UK.  There was a really clear focus upon how protection insurance and SMEs are mixing well and potentially a big opportunity that’s been missed from both the SME side and also from the insurance sector side.

Roy:            Hi Jeff, morning.  How are you?

Jeff:             Yeah, I’m well thanks, Roy.

Roy:            Good, excellent.  Listen, I personally think that this study is a bit of a Bible for advisers.  I actually look forward to it every year and I genuinely mean that because I think part of this is to make people aware of the State of the Nation which is obviously what you called the report.

Jeff:             Yes.

Roy:            I think the other thing about this report is that it gives us some unbelievable statistics which are firstly quite frightening, but secondly actually useful for the advisory community to use when they’re going round talking about small businesses.  So, you know, I think any listeners should definitely have a look at it.  But there’s one that jumped out the page straight away at me and in the research it showed that six in 10 businesses would cease to trade in less than a year if a key person was no longer with the company.  I mean that is shocking and a clear testament to the importance of things like key person.  What are your thoughts on that?

Jeff:             Yeah, you’re absolutely right there Roy, that is shocking.  No look, this is our seventh edition and we brought out the first one in 2009.  What this edition is showing – and actually quite a few of the others, is that 75% of businesses have loans of one sort or another and the level of borrowing of a typical business over the last couple of years has actually increased.  And a lot of it actually has also some form of personal security against it.  And then when we consider that 96% of the six million businesses registered have less than 10 employees and are typically run by just one or two people, who are not just the key to the business but probably are the business, then if something happens to one of them, it’s highly likely without some sort of Plan B that they will fail.

Roy:            Yeah.  Do you think that most people realise – I mean again, this is going to be a podcast of stats Kathryn, but do you think most people realise that it is 96% of businesses that have less than 10 people?  Do you think advisers realise that, Jeff?

Jeff:             No, no I don’t.  I actually think that those that aren’t involved in business protection are slightly fearful, because they think they’re going to be going in and talking to some sort of blue chip company which it absolutely isn’t.  You know, it’s the guys on the business parks and the industrial estates, it’s those types of businesses now that make up the majority of the businesses in the UK.  And because they only have typically 10 employees, you know, one or two or three of them will be absolutely key to that business – the reason it runs.  And that’s why it’s so important that more advisers go in and talk to these small businesses because they need the advice.

Roy:            And I think that’s probably our first takeaway of this podcast – the smaller the company, the more reliance you have on a smaller amount of people, because if those people are taken out of that company, that company will have bigger problems than a bigger company, where they’ve probably got the resource to replace that person.

Jeff:             Yeah absolutely, you know, you look at something – I work for L&G, right?  If something happens to someone at L&G we’re all going to be pretty sad about it, but it’s not really going to impact the business.  But if something happened to a small business that is literally three or four people, of course it’s going to have a massive impact.

Roy:            And just something else that you said there, do you think there’s also a view amongst certain advisers that this is too complicated because there is that and we said this – misapprehension that we’re all chasing these big blue-chip companies that you referred to?

Jeff:             Um, maybe yes.  I think it’s a lot of things, isn’t it?  It’s how do you get into it?  How do you speak to the business?  How do you approach them?  What do you say?  And so I think it’s just that not knowing.  And most of our advisers are now either mortgage brokers or they might be in pension and wealth and they’re busy doing what they’re doing because there aren’t that many advisers for the size of our population and they are busy.  And so to actually focus on doing something different is quite difficult.  And I think when you have the perception of, ‘Well, how do I even approach that business and what do I say?’ it’s very difficult.  I just think that’s why not so many get involved.

Kathryn:       So I think what was interesting, sort of like looking at the report as well, I know we’ve just been talking about, you know, key person cover, we’re talking quite a lot about the business vulnerability and it was that a lot of the statistics really stood out for me and what I liked about the report – and I’ve never been shy about this, is that I’m not somebody who really likes statistics.  I get a bit fed up seeing numbers.  I kind of – I want to know the richness behind the data.  But with the report, I actually found it really easy to follow and to read through and to see those key bits.  And I think, you know, I’d say on the business vulnerability side of things, it was showing that about 75% of the businesses had a loan that would actually be really hard for them to address if a key person was gone.  Many of them, again, about 75%, hadn’t even heard of things like executive income protection, but even more interesting than that, 84% of them said that they were actually really keen and eager to hear about it.  I’m wondering if that’s possibly a bit of a knock-on from this last year or something, where I imagine especially with smaller firms, if there’s been somebody who’s not been well or unfortunately they’ve maybe lost somebody, it’s probably had a really big impact, everything that’s happened since well, 2020 and 2021.

Jeff:             Yeah, sure.  Do you know, I think whether you’re in business protection or personal protection, if someone’s had an event i.e., you know, someone close to them or themselves have been seriously ill or someone has died that they know for example, they are obviously very open to talking about and doing something about the need they have for some sort of protection.  And I think over the last 18 months we’ve all been through an event.  So we’re all in that place.  And businesses aren’t any different.  But they’re probably enhanced because they’ve actually not been able to operate in the normal way, you know, people have had to go and work remote or they’ve had to put a lot on furlough and I think naturally that would have made them feel more vulnerable.  But often they don’t know what the options are because they’re not talking to anyone about it.

So if you prompt them or suggest anything which is the point I suppose, if you say, ‘Have you heard of relevant life or exec IP?’ then I think most of them are going to say, ‘Well I haven’t, but I’d really like to know more if that’s going to help me,’ and I think that’s because we all feel – and businesses in particular, just more vulnerable.  And that comes back to the point of just talk to people because if you talk to them and let them know what they can do, they probably are more open to it than they ever have been.

Kathryn:       Absolutely.  I think as well, sort of like before we move onto the next little bit, it was interesting as well and quite – I think a bit worrying as well that, you know, that obviously it was about 54%, so I think – so well over 250 of the companies that responded had given personal security for business borrowing.  And again, if there’s not some kind of protection in place for that which, you know, essentially, it’s – it is going to be things like these protection insurances, that’s a huge risk.  And not just a business risk but obviously that knock-on effect to potentially their personal wealth as well and their homes and obviously then a knock-on effect to their families.

Jeff:             Well can you imagine, you’re ill, your business fails and then you potentially lose your home?  That’s not – really not a very good sequence of events, is it?

Kathryn:       It’s just unthinkable.

Jeff:             I mean what that indicates obviously is that there’s a lot of – and you do find there’s a lot of small businesses that have directors’ loans.  And directors loans are often, you know, the way of either bypassing a bank or dealing with the fact that the bank won’t give you borrowing.  And of course that might have been accentuated despite CIBLs and things like that over this period of time.  And a director’s loan has to be repaid.  And in the event of something happening to somebody, this could be, you know, this could have a property against it or all sorts of different things against it.  And I think that’s, you know, another stat that jumps out of the page and tells the adviser that we should be covering director’s loans in exactly the same way that you cover a mortgage.  And I think first callout for signposting of the podcast – but if you’re a mortgage broker in particular listening to this, it’s the same principle.  You’re covering a loan for a mortgage, so that if someone dies or has a long-term illness, that the mortgage is paid off.  Well, what’s the difference between that and a director’s loan, is a question I would pose?

Kathryn:       Absolutely.  And I think just going back, you know, a little bit to what you were saying there Jeff, about chatting to people.  One of the things that the report tends to pick up as well is that we’re still not necessarily as an industry being seen as the go to place for these kinds of insurances, which just feels so bizarre because obviously the insurance world has been around for such a long time but when we were looking through the research it showed that about 30% of the people that responded would speak to their accountant about these kinds of things.  And 28% would go to an adviser, so it is kind of obviously – it’s near equal but really when we talk about insurances we should be sort of I think seeing – well hopefully we’ll be seeing much, much higher things than that.  And we also still found as well that 46% of the people that responded didn’t see any need for business protection at all.  I mean, what’s your instinct Jeff?  Why are people going more towards their accountants than they are to advisers?

Jeff:             I suppose if they haven’t got an adviser, someone they know, then their trusted professional source is now their accountant.  Because it’s pretty almost pointless speaking to the bank because the bank will do very little about it now.  I think it’s encouraging that actually 54% will go and speak to a professional adviser.  Frustrating I guess, that more of them don’t actually think from the point of view of protection to go and seek out an actual financial adviser.  But for me, actually in some ways it says, “Look, as an adviser, if you want to be in this business then actually your clear point of contact should be an accountant.”  And I think we’ll all know that many accountants aren’t that aware of what the solutions are and what the actual risks are.  They just don’t.  I mean, they need educating as much as the businesses do.

If you go and speak to the accountants, then you can see that you would open up a really good business opportunity.  Because if businesses are speaking to their accountant and the accountant is more educated to the – to what the risks and the solutions are, then there’s great opportunity there.  And as for, you know, businesses not actually showing any interest, is that any different from anybody else?  Mostly, they don’t know what they don’t know.  Or they believe that the insurance is maybe four times what it actually is.  And so I think it just comes back to that need for advice and us being proactive as an industry to go and talk to them and make them more aware of what those risks are, but also what the solutions are.  And actually, really, what a small percentage of their business turnover that would be.

Jeff:             I’m not surprised at that stat actually about people going to their accountants, because if you think about the route to market, there aren’t enough of us and there’s certainly not enough of us that go out, you know, peddling our business protection wares and I actually look at a stat like that and think of it as a positive.  Because let’s face it, when you’re doing key person and shareholder protection, you should be talking to that person’s accountant anyway.  There are issues about valuations.  There might be issues about cross option agreements.  There are all sorts of different things where it’s important you work alongside that person’s accountant.  And I think what this does is, is that it shows us once again that we have to collaborate with our sister professions, which for me are accountancy and legal.

And therefore, this is a wonderful opportunity actually for our listeners to think about the accountants that might be in their local towns, cities, villages, wherever they live and go and talk to them in the first instance, about how this might affect their companies.  And an angle that was pointed out to me a while back was, it’s in an accountant’s interest to have its clients insured as well.  And the reason for that is that accountants are mainly transactional.  Yeah?  And therefore they earn their wares, their monies, their revenue streams on doing pieces of business for companies.  If those companies are no longer around because of all the things that we’ve just talked about, actually that doesn’t help the accountancy firm either.  And I think if you can go in from that angle to a certain extent with some accountants and say, “This is effectively you protecting your clients against your own revenue book,” what I’ve certainly found is a very receptive audience.

Kathryn:       I think – sorry going back as well a little bit to just what you were saying before Jeff, about people – what was it, sorry I’ve lost my train of thought there a little bit, about the expecting that the insurances are going to cost a lot more.  And I think this kind of goes to what you often say as well Roy, about the average cost of income protection.

Roy:            A pound a day, a pound a day

Kathryn:       I know, it’s a pound a day, Roy, for an income protection policy.  But, you know, obviously, the report showed that many people think that the cost of insurance is about four times what it is and for things like income protection, they expect it to be about 50% more –

Roy:            Yes.

Kathryn:       Than what the actual cost would be.  But then, on the opposite side of that, which I found really surprising, is just how much people seem to say that they are – they’re willing to potentially spend on these insurances.  There was about 72% were willing to spend about £50 or more, over half were saying that they could actually potentially go over, you know, sort of like up to or over £750 per month and a quarter of them were potentially saying over £2,000 per month.  I mean, that’s quite a disparity really isn’t it?  Because you kind of think, well hang on a minute, a lot of people may be unsure of the cost, they probably think it’s too expensive, but then a quarter of them were thinking it could be about £2,000 a month.  So and if they’re expecting it to be, I don’t know, potentially even more than that, then that’s – we’re really not sort of like getting over the pricing.  It’s probably that we need to, I don’t know, do we need to get some like really good case studies out there of the costings?

Jeff:             Yes, possibly.  I suppose your perception of what something might cost will depend on the size of your business and your turnover and what you’re having to pay out for other things.  And because there are quite a few small businesses, I mean, I think until they actually see what the costs are, as you say, so good case studies I suppose that could be used just to make them more aware of what it might cost.  I think the important thing I get from that is they are – they accept they would need to spend money.  And then I think if you do a good job of making them really aware of what their needs are, just the same as any other protection conversation, so long as you can fit within a sensible budget, they will spend what they need to spend in order to have a solution to overcome that need and that risk.  So I think it’s positive that so many say they will spend money and it doesn’t surprise me that they had no idea how much it would cost though.

Roy:            Yeah, I mean one of the issues undoubtedly here is general insurance, so companies will have to take out certain forms of general insurance, as we all know, so certain indemnity insurances, employers’ public liability insurances, D&O insurances, etc.  You know, if they’ve got cars, they’ll have to be insured, if they’ve got offices, if they’ve got computers and I think there is a feeling that particularly with Covid, that some of these insurance costs have gone up due to, you know, business interruption claims and we’ve got to stop thinking that insurance is a different word.  You know, a lot of these small businesses will see general and life as the same insurance, i.e. the principle is the same and I think we need to sort of again break down these silos and just realise that we are part of that whole solution.  So if somebody is insuring their computers, they should be insuring their people.  If someone’s insuring their fleet of cars, they should be, you know, thinking about long-term sick pay, etc., etc..  Let’s actually throw these things into the same melting pot, because I think then, once you sell that concept of, you know, actually the person’s probably more important than the computer by the way then, you know, again I think you’re going to find more open doors than you might expect.

Kathryn:       I imagine this is a bit like that social issue in general though isn’t it?  It’s like the amount of people who take out pet insurance rather than taking out income protection for themselves.  We forget about the fact that we essentially are the machine that makes the money.

Roy:            Correct.

Kathryn:       And it’s just trying to get people to have that mindset.  But, you know, again with the report, I think it was something like 94% of the businesses said that they had a key person.  And I imagine obviously for a small business that is often usually the – sort of like the company owner.  But again, it’s sort of a case of well so many of them haven’t even heard about this kind of policy.  Like I think what you were saying Roy, if people are really looking at their accountants maybe there is sort of like a real need for advisers to sort of like really try and engage with maybe even local accountancy firms to them.  And just like some people engage with estate agents to obviously make sure that, you know, protection insurance is being put in place for mortgages.  But to really sort of like speak to them and say, “Look, do you know that we’re here?” you know, in a sense.  “We can do this and we can help and we can help and we can step in,” and again potentially even, you could set up some kind of signposting agreements with people sort of like that aren’t necessarily within our industry.

Jeff:             100% and the other area – and it’s definitely worked for us at Cavendish Ware – I think you do it as well Kathryn, is general insurance brokers.  So, you know, your general insurance broker and again just to re-emphasise people have to have general insurance, yeah?  Remember it’s the law.  Stuff like Public Liability.  Your general insurance broker particularly with the, you know, it’s a local sort of business, go and talk to them.  Because remember they have got lines of demarcation as well and most general insurance brokers do not have permissions to come over to our side of the fence.  So I think that we certainly work with some general insurance brokers where they would do the general insurance side and then they will signpost – there you go, second mention of the morning – into us for these sort of things and vice versa.

And remember that if you’re looking after small businesses, or you’re seeking out small businesses, they will need general insurance because it is the law on certain subjects.  The ability to have a general insurance broker that you can refer to, if you don’t do it internally, means that signposting will work that way as well.  So I think it’s just again, thinking outside the box here and just having a bit of commercial nouse about how you could potentially open up doors with the businesses around the business if that makes sense.

Kathryn:       Absolutely.

Jeff:             Yes I think, you know, we’ve done this research obviously which is really useful and I think it’s useful whether you’re looking to get into business protection or whether you are experienced as you are Roy, but I think, you know, you wonder whether we should extend it slightly to include something about the way to look to generate business.  So, you’re both well experienced at doing that and we wonder whether we should have something additional that says do these things, speak to these people, this is your approach, these are your opportunities.  Because I think we do a bit of that through this report but we don’t do that as much.  And we run webinars where we try and give people ideas about how they can enter the market and what they can do.  But actually, taking some of your experience could be really useful.

Roy:            Yeah, and going back to your case study point Kathryn, a big shout out for Legal & General, because during their training they still regularly bring in the 7Families campaign and I’ve said from day one, as you both know, that the 7Families is about corporate as much as it is individual because the stories and the principles are just the same so, you know, by all means people go back and use 7Families just to repeat there’s no intellectual property, you can use any of the videos that we have, the link’s on Kathryn’s site somewhere or we can put the link up again.  That can be used for business as much as an individual, you know, situation.

So Jeff, I wanted to ask you about the dreaded Covid word if that’s okay for a minute?  Look, it’s changed our lives in so many ways and, you know, very negative connotations but actually if you excuse the pun, some positivity has come out of this as well.  What’s the positive messages that we’ve learnt from Covid in particular with business protection do you think?

Jeff:             Well I think, you know, we touched on it earlier and it is the vulnerability maybe that businesses feel.  And I don’t think, you know, anyone should be thinking that we’re taking advantage of a situation.  I think it just spells out that everybody’s felt more vulnerable.  And a business in particular, where they’ve had to furlough staff or they’ve had to work from home and they’ve had to change the way that they work.  And they might, after short periods of time, see their revenue almost come to a standstill.  But then they’ve been resilient and found a way through it to keep that going.  I think it’s that awareness of that situation.  As an adviser, go and speak to people because they are open to it and they are feeling vulnerable because they’ve had to go through that journey and they will be thinking, “Well, what if I couldn’t have put someone on furlough?  What if something had happened to me, what would happen to my business?”  It’s just never been a better time to go and open up those conversations.  Never been a greater need for advice in fact with small businesses to just embrace it and go and talk to people, is what I would say.

Roy:            What about the indestructibility side of it as well?  Do you think there’s a sense that, you know, there are business owners as well as individuals who before Covid would sort of shrug their shoulders and go, “That’s all very well Mr Adviser, but I don’t think it’s going to happen to me.”  Do you think that’s changed – there’s been a sea change of that, which can be used in this context as well?

Jeff:             Yes.  Because I think we all realise that actually it could happen to us and maybe it has happened to us or someone close to us to one degree or another.  And that’s that point about the vulnerability, you know, we all feel that more don’t we?  You know, I think we’ve been starting to go back out and seeing people face to face, we’ve been going to industry events and I’ve got to say, three or four days after I’ve been to one of those events, I’m doing a test because I’m thinking, you know, “Have I managed to pick up Covid during that time?” and you worry about it and you think about it.  And so I think that, you know, as I say, it’s no different for a business but I think it’s enhanced for a business.  There can’t be many there sitting thinking, “Well it won’t impact me.”

Kathryn:       Absolutely.  And I know exactly what you mean in terms of like being a bit cautious going to things.  I know Alan – obviously he went down to London and managed to see you all last week.

Roy:            Yeah, we had a boogie round our handbags last Thursday night.

Kathryn:       You did, you did, I heard all about it.  No video evidence though, unfortunately.  But yeah he – for a good while he was really umming and ah-ing until probably about the day beforehand about whether or not to get the train or not or to drive down.  And he just really couldn’t sort of like, you know, like you said, that bit of vulnerability of thinking well, “Who am I going to be on the train with?  What am I going to –?”  And then like you said, then probably the other side of things, you know, obviously when you all saw each other, it was something like three or four hundred people probably in a room together and you think, “Well actually, the train’s probably nothing compared to us all being in here together,” kind of thing.

But again though, I think like you said, it has sort of like made us all aware and I think that again showed in the statistics when it was something like 34% of the businesses were actually quite keen now at looking at stuff like the Group IP.  I think – I know we all sort of like – I think we all do that thing, don’t we, where we sort of say, oh as a teenager you sort of like feel that you’re invulnerable and you’ll live forever and there’s no kind of worries and that’s why I think a lot of people say, “Oh well, young people don’t necessarily want insurance, because why do they need it?  They’re gonna – they’re never gonna – nothings ever going to happen to them, ever.”

But then the fact that people who are in their 30s, 40s, 50s, still don’t have things like income protection, or the group cover, it does still kind of indicate that a lot of us still think that we’re indestructible.  We’re sort of like, we’re not kind of really – obviously so many of us hear all those statistics, like I think it’s now – it’s one in two people have cancer at some point in their life and there’s so many other ones as well.  The amount of people who are diagnosed every day with Parkinson’s is much higher than I think a lot of people would realise.  And yet we see all this stuff but yet we still don’t have, you know, we’re still at a point where not everybody has things like the income protection in place.

Roy:            I think the group point is a really valid one and that’s fascinating that 34% say they’re keen to look into it.  You know, the question straight away is, “Well how many advisers are out there going out and searching out that market,” because that’s one in three companies obviously.

Jeff:             Yeah, do you know, I think where businesses have had to furlough staff – I think most businesses, as I’m sure you both do, you know, really care for their people and take responsibility for the people that you employ and work with.  And you do wonder whether that’s made them think more now, well what would they do if they couldn’t work, but in a different situation, you know, how would they cope?  And so thinking about group IP or group cover which is a relatively cheap but a good value way of getting wide cover, maybe it is – maybe there is an element of that.

Roy:            Well it’s actually cheaper than people think.  I mean, it’s normally less that 1% of payroll so again sometimes, you know, internally we think these things are more expensive than they are.  I mean, I have to say, death in service – and Kathryn and I both advise on this, when you show the premiums to clients, you often get, “Is that, is that per month?” and you go, “No, that’s for the year,” and they’re – “What?  Why’s that so cheap?” you know.  So Ron Wheatcroft mentions this all the time, you know, I think, you know, for those of you listening in who don’t do group, it’s something worth looking at or again – signposting number three – we should do signpost bingo, shouldn’t we Kathryn?

Kathryn:       I was going to say we should have like a little swear jar somewhere, I mean a money drops sign, where it’s a signpost drop.

Roy:            It’s not swearing signposting, come on.

Kathryn:       No, no.

Roy:            But I think, you know, that it’s worth knowing a bit about group because actually group – and Legal & General let’s face it, do both, don’t they Jeff?

Jeff:             Yes.

Roy:            Group and key person actually are the same principle and complement each other.

Jeff:             Yeah, absolutely and do you know, it’s something we’ve been talking about internally as how we work together a bit better to try and promote both products out at the same time.  So, because a lot of advisers who are in the sort of group world, don’t actually do much in the individual side.  And those on the individual, even business protection, often don’t think about group that much.  And it is really important that they are – that you work both together.

Roy:            Yeah, some of the best signposting I’ve seen in 2021, I have to say is from group benefits advisers to individuals.  And I think that, you know, again, some group people will be listening to this, but there will certainly be some individual people listening to this, go and seek out the employee benefits guys because they don’t all do the individual.  And the synergies are for me, you know, just staring at you in the face.  But if you’re siloed into a, “Well I’m only going to do that,” maybe there are opportunities there.  So, as in – don’t assume that the employee benefits consultants always do individual guys.

Kathryn:       Absolutely.  I think obviously again, sort of – I’m going back slightly to some of the statistics that really sort of like stood out for me and probably surprised me in terms of like these borrowings and the vulnerability and things, you know, we had as well in there that roughly the average borrowing during Covid for a business was £122,000 and almost a fifth had borrowed over £250,000 and it’s sort of like, it’s sticking with me, the whole thing of people putting up a lot of their personal assets as kind of like – is it collateral, probably for it, is that the right word?

Roy:            Yeah, collateral, Yeah.

Kathryn:       I just suddenly got myself a bit paranoid then I was using the wrong word.  But, you know, with the whole planning for the future, you know, when we’re looking forward to try and encourage companies to listen to us, to what protection can offer and I know that it’s probably this age-old story, isn’t it?  Or this age old thing of a saying, you know, how can we get people to listen to us more? You know, we usually say it a lot in the personal space but now with the businesses, what can we do Jeff, to really start getting this conversation going?  And not just from advisers but, you know, where should we be going, who should we be trying to contact to sort of like really try and engage with businesses?

Jeff:             Well, I think firstly, you know, within our research document, what we’ve tried to do is rather than just say, “Here’s the output from the research, here’s the interesting – obviously very interesting stats,” what we’ve wanted to try and do is say, “Well this is how you can use it.”  And so we’ve got a variety of conversation starters that work their way through, it’s almost like a so what.  Well actually, this is what you can do with it and this is how you can have a conversation around it.  And I actually think that although someone like Roy, you know, with his experience or even yourself Kathryn, would just pick it up and use it to target conversations with accountants and business owners alike.  If you’re not so experienced or you’re new to business protection then actually the research will still give you not only a great introduction to business protection but also show you how to approach businesses and what to say.

But that’s also the same for approaching accountants.  It’s not necessarily just accountants.  Maybe it’s actually going to your local business lunches or business groups or Federations of Small Businesses, that type of thing.  If you look in your local town or your local area there will be a variety of networking-type clubs that businesspeople will go to.  And often that gives you great opportunity just to go in and talk and to network and get to know people.  And actually trying to educate them a little bit about what you can do.  And the research document does have these conversation starters and it will really help you to think about what to say and then you’ll go in with some credibility with those business owners or accountants and alike.

Roy:            I think the other thing there is that you get an immediate level of respect because you’re going in with the facts and these are facts that most of these people won’t understand, particularly some of the introducers.  And I’d also encourage the use of social media here.  You know, I suspect it’s okay to share any of your particular slides isn’t it, Jeff?  I hope so because as you see, I have been.  But –

Jeff:             Yes it is.

Roy:            You know, I think sometimes, you know, using some of these stats and putting them out in the public domain on things like LinkedIn will actually get you some commentary and I think if you are the person that is the expert on this field and this State of the Nation Report enables you to become an expert, then don’t be concerned that you’re going in to see a big accountant or a big lawyer or someone who you think, you know, is going to be more established than you.  Actually I think you’ll find they’ll be very, very keen to understand some of these situations for some of the reasons we’ve alluded to earlier.

Jeff:             Yeah.

Roy:            Plus, accountants and lawyers in particular all signpost themselves as we know, okay?  So they will signpost internally okay, but also externally.  And I think if you can become – and I like that idea of business clubs, I’ve seen several IFAs that do it in a very successful way, you become that expert in that business club on business protection.  Your name and your referral structure will arguably spread like wildfire.

Jeff:             Yes, I’d agree.

Kathryn:       Oh absolutely, it really does.  On social media, it’s an incredible thing.  It’s one of those things that social media is a bit of a – it can be a wonderful place and also a negative place, but if you do find a really good sort of business club – there’s a number of them on Facebook – there’s quite a few business communities on there and if you do sort of like just go in, have a look, sort of like maybe watch it for a couple of days, see who’s saying what and different things, but I tend to find a lot of the time for me, when I’m looking at these things as well, is that there’s a lot of people in them who tend to be quite a lot of maybe wealth or pension folk –

Roy:            Mm, correct, Yeah.

Kathryn:       And obviously absolutely not my area.  But then sometimes there’ll be the odd thing or where someone will say, “Ooh right well, I’m looking at this –” and obviously it’s not necessarily their key area, but it’s mine so I can easily step in and say, “Oh, you know, actually this is what we can do here,” and, you know, I just kind of monitor from the sides in a sense and just come in whenever I feel it’s useful.  And it has, you know, it can take a while, but it does come to a point where somebody will suddenly start tagging you and saying, “Oh, I remember, you know, Kathryn said something about this the other day, what’s your thoughts this time, Kathryn?”  And it’s just a really nice way to meet more people, as you say, Roy.  I shall say it now, it’s a good way of sort of like building everything for signposting and chatting to different people.  But, you know, I really liked the idea in the report as well Jeff, when it was all these conversation starter sections, that you have for different situations –

Jeff:             Mm-hm.

Kathryn:       I think that kind of really sort of like hit home the different ways of potentially different contexts and different approaches to take.  And I think with everybody as well – I think if somebody is starting to go into this space a little bit, I kind of think, you know, somebody might be a little bit nervous and sort of thinking, “I’m a little bit out of my depth here.”  I think they’re probably either going to be nervous or incredibly confident.  I’d probably feel a bit more comfortable with somebody who feels a bit nervous sort of like wondering how it was going to go.  But it’s just like with anything like when people first started out in advice or when they first started doing that new area that they were starting to advise on, the first couple of times it might feel a little bit strange, you might not get it done perfectly right but it always comes down to practice.

Jeff:             Yes, yeah it does.

Roy:            Yeah, the nerves.  Let me tell you, the nerves never end Kathryn.  I mean I’ve been doing it for donkey’s years and I still get nervous.  But, you know, there’s a good thing about nerves as well because it shows a certain level of humility and non-arrogance.  So, all I would say to people that are thinking about doing this is firstly, what have you got to lose?  Secondly, this is a huge opportunity.  And thirdly, if you’re not doing it, who else is, okay?  And what we can tell you is – and it is very evident from this report, that there’s simply not enough of us out there, i.e. there is no competition.  So don’t think, “Oh, somebody else in my area’s already doing this.  Oh I bet there’s someone doing this already.”  You know, those sort of things.  If you look at Ron Wheatcroft’s Swiss Re Health & Term Report every year, you’ll see the amount of business protection is far too low and you’re therefore in a sort of a unique situation in that you don’t really have oodles of competition.  So I think if this is an area that you’re thinking of going into, why not try it?  And this sort of report can be your, you know, part of your armoury.

Jeff:             Yeah, absolutely and, you know, I think it’s about taking one step at a time, isn’t it?  And I know when I first got involved, many years ago now, in business protection, my manager at the time said, “Right, just go out, talk to the business, do your fact find, find out about them, just find out stuff and then come back, sit down and we’ll go through it and work out probably what we want to do, then you go back and present the solution.”  So, you don’t have to know it all in one go, you know, you can just do it step by step, go away and then go back.  No one expects you to know everything straight away.  So certainly don’t be afraid of taking those first ones.

Roy:            I completely agree with that and there are some wonderful insurance companies, L&G of course, but others, we have to say Jeff, who give some excellent training so –

Jeff:             Yeah, they do.

Roy:            You know, if you are concerned about this, go and talk to your local broker or consultant from the various business protection insurance specialists and go on a course.  And on that course, they’ll give you wonderful facts such as we talked about today but they will give you some of that sales training which, as Jeff alludes to, is definitely needed as well.  But I think, you know, it’s a bit like the riding of the bike, isn’t it?  Once you’ve done it a few times, you’ll find it’s not a lot of difference to your basic protection – individual protection advice, because and Kevin Carr regularly says this, “It’s the same product, there is no difference in the product.”  Yet there are things like cross-option agreements and there are a few vagaries like that, forget about those for the moment, the product is the same.  You’re already selling it to your individual clients.

Jeff:             Yeah absolutely and do you know, if you’re not sure about some of the technical stuff, even my – a couple of my market development managers that go and do all our webinars and courses, they’re really experienced with this and technically really know their stuff and we often get advisers who will call them and go, “Ooh, how should I structure this?  What’s the best way of doing it?”  There’s always someone, it’s not just us, lots of the other providers have got some excellent account managers who really know their stuff so as Roy says, just go and speak to people.  They’ll only be too happy to help.

Kathryn:       I think when we were chatting the other day Jeff, sort of like as we were preparing for this, something that stood out for me that I felt was really good and again, I’m sure other insurers do it as well, but it was obviously we were specifically talking about you and your role and L&G, is that when people do come to you and when they are wanting to see this kind of – sort of like get a bit of training in this kind of area, it’s not going to be sort of the, you know, sort of – it’s not going to be what a lot of training which is, you know, sort of like, “Oh this is our training, this is L&G and this is what our product does,” in a sense, it’s a case of this is unbranded, this is just simply how key person works.  This is how exec IP works and it’s more sort of like the, you know, it’s just general market education and bettering the market as a whole, because the last thing we want as well is for anything – anybody to try and sort of like advise and not to fully understand the product. So where can people – if somebody does want to have this and they just want to go, “You know what, I just want training on this and just to understand the fundamentals,” how would they kind of engage that with your guys?

Jeff:             Well look, on the L&G website under the Protection area, there are – there is a section on webinars and workshops and we have three or four different workshops which we look at for business protection so we have an introduction to business protection.  We have a key person, we have a shareholder webinar, we have an understanding accounts webinar.  And as you said Kathryn, you know, we don’t talk L&G at all, it’s purely generic knowledge and skill based to help you do your – do your job.  We work on the basis that, you know, L&G will get their fair share if people start to write protection so we don’t do it.  We’re CII accredited and you can’t be CII accredited if you’re doing a product push.  So we don’t do it.  And we’re just going through the sign-up again this year to make sure we keep that accreditation.

So, you know that you’re just going to get good, proper generic sales skills and technical knowledge to help you do the job in an area. So they’re good if you’re coming into it and they’re good if you just need a bit of a refresher on one particular area.

Kathryn:       Good.  I was going to say, one that I have definitely had this kind of an experience as well.  I was doing – well I’ve been doing quite a bit of sort of shareholder and group protection for a company in the shareholder side of things.  I suddenly had this thing where somebody’s sort of like tax adviser, was saying that what I was saying was wrong.  And I did that automatic thing of thinking, “Oh Lord, I’ve got it wrong, oh what have I done, what have I done?” kind of thing and automatically just assumed that I’d done something wrong.  And I spoke to the insurer that I was using.  I spoke to their taxation specialist and I have to say, I couldn’t have found any better source of support or information at all.  They were – well obviously very happily for me, they said that I was absolutely right and the tax adviser was wrong, which was obviously a good thing but, you know, straight away they were saying, you know, “If you need us to, we can always get in, you know, we’ll get on the call with the client, with the tax adviser, we’ll put them straight in a sense as to how it all works.”

So, you know, they really are absolutely, you know, amazing and really good and their technical knowledge is phenomenal when you speak to the business specialists, you know, that are really into it –

Jeff:             Yes.

Kathryn:       In the sort of like, the technical departments and so I’m very in awe of the way that their knowledge is, but yeah, definitely recommend that people, you know, sort of don’t just sort of look at it and think, “Oh, I kind of understand,” and then wander off and start doing it a bit, you know, do engage, do do the training.  And, you know, the people in the insurance companies are there to support and they do genuinely want to support people as well.  I think whenever I speak to people in this kind of area, they’re just so eager to sort of like – to chat and be helpful.  It’s wonderful actually.

Jeff:             Yes, I think that’s –

Roy:            I think the other – I was going to say the other opportunity that you reminded me of there Kathryn, is that there is an added advantage of business protection compared to individual.  With individual – and I hope all our listeners review on a regular basis, but generally sum assureds would go up but slowly over time because you might be covering a mortgage or whatever the case may be.  But business protection, the sum assureds go up much quicker because on the basis that most businesses expand over a period of time, what of course you find is that when you’re doing your reviews and it’s really important guys that you do your reviews on a regular basis, that actually you’ll get to the situation where the protection that you set up might suddenly become inadequate or a new key person has joined or the business is just simply bigger than it was before and the valuations for shareholder protection need increasing.  So it’s not a one-off piece of advice this, actually it’s part of the protection suite of benefits where I – my experience is that the sum assureds go up, which ultimately are greater revenues for you as well, so, you know, don’t forget that point.

Kathryn:       Absolutely.  Well I think we’re close to the end of the podcast then.  I don’t know if either of you want to leave anybody with any final pearls of wisdom at all?

Jeff:             Only from my point, that –

Kathryn:       Really awkward if neither of you do.

Jeff:             Have a look at the research, have a look at our website and what we can offer to help you do, speak to other providers.  Hey, I mean, do you know, there are plenty of really, really good resources out there and have a go.  Go and talk to some businesses, talk to some accountants.  It really is a great opportunity from a business perspective.

Roy:            Yeah, I would thoroughly endorse everything that Jeff’s just said.  Have a go, you know, dip your toe in the water, go out, talk to some people.  Go armed with, you know, this – I mean I personally get, you know, take a hard copy of some of the slides with me.  Go armed out with these and just test the water.  I would be very surprised if any of you get any pushback.  And I think that people that I know and have started down the business protection road over the last few years, very rarely look back actually.  What they tend to say is, “I wish I’d done this a few years ago.”  So, you know, I think the final thing I would say is, the most alarming stat that jumps out of all of this is the size of the market, guys.  And that means that, you know, there is no real competition.  There’s, you know, there’s lots to go round and I think our great industry has got a little bit of a responsibility here.  I think if we leave, you know, what’s it guesstimated to be, £2.5 million employers and we don’t go and talk to them, well then we’re not doing the right thing either so, you know, I would say, lots of opportunity, get the training.  You know, download these stats and other stats and go out and try it.  I’d be very surprised if you turn round and say, “I think this was a bad idea.”

Kathryn:       Fantastic.  And that’s a good thing to potentially end on.  Well thank you both obviously so much for coming and chatting about this report.  There was a lot more statistics than I usually go through and everything, so I may go and have a cuppa just to recover, but no, I think it was a – it was really good to see those numbers, because they do say absolutely a lot.  So, as I say, thank you both very, very much.

Jeff:             No, thank you, Kathryn.

Roy:            Thanks very much.

Kathryn:       Absolutely.  Well next time I’m going to be back with Matt Rann and we’re going to be chatting about some underwriting of some sort.  I have to say, for the first time in a long time, I’m not completely sure what we’re going to be chatting about next time, so I’ll have to just leave it as a mystery for everybody.  But if anybody would like a reminder of the next episode, please do drop us a message on social media or visit the website practical-protection.co.uk.  And don’t forget that if you’ve listened to this as part of your work, you can claim a CPD certificate on the website too, thanks to our sponsors, OctoMembers.  Thank you both again, speak to you soon.

Jeff:             Thank you, bye.

Roy:            Bye bye.

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