…A title which could very easily be a film starring John Malkovich. However, it is becoming extremely difficult to find such a breed i.e. co-op insurance agents. Along with many large insurance companies in the UK, the CIS or Co-Op has vastly reduced its direct sales force over recent years in an attempt to reduce costs and increase profitability.
20 years ago there were many marauding direct sales force insurance agents in the UK, with the likes of The Man From The Pru, CIS, Abbey Life et al all employing their own salespeople to sell their companies insurance and savings products. Whilst they are now a dying breed, insurance agents served a valuable purpose, engendering a savings ethic throughout working class areas that would never otherwise have thought about putting money aside for a rainy day. The cheery insurance man would call each Friday (generally payday amongst the masses) and collect the shilling or two per week which covered the cost of a funeral policy for mum and dad, and a nice savings plan for when junior turned 18.
Of course, by the time junior DID turn 18, the proceeds of his/her parents’ shilling a week barely covered the cost of his/her first round in the pub, but the savings ethic was there and many of today’s 40-somethings still stick to the advice – put something aside just in case, a savings plan for the children and a bit of life cover.
Of course, no such service exists today, with the major life companies turning to the internet and June Whitfield on Challenge TV rather than sending their chaps out every Friday. Cash collection services (known as industrial branch sales) became too costly to continue and the advent of the internet saw the end of this way of buying savings and life products.
The recent introduction of stakeholder products – low-cost basic policies designed to be simple and straightforward – may seem like a good idea, but unfortunately this has led to the major life companies pulling out of these markets as they can’t make money from them – which is a shame as the life companies may have been making a fortune from the previous complicated products with initial and allocation units, but at least they were using some of these ill gotten gains to advertise the fact that it was a good idea to save and insure yourself adequately.
Their withdrawal from the market has left a gaping chasm – now it is left to Independent Financial Advisers to evangelise the need to save and plan ahead. The ‘lower end’ of the market is therefore now being marginalised as life companies concentrate on other, more profitable areas.
It remains to be seen whether this will have a long-term detrimental effect on the savings ethic – recent figure showing record levels of personal unsecured borrowing seem to suggest that today’s’ working class would rather buy in haste and repent at leisure than put a shilling a week aside – perhaps there is, after all, a place in today’s’ financial industry for the ubiquitous insurance man after all…