UK’s leading protection company, as Rachel Gordon reports The message from the head office in Toronto to the UK is to go for “bold growth”. And for Canada Life over here this will mean acquisitions, and a programme of expansion, which it believes will make it the number one protection company.
The bold growth strategy is recounted by marketing director Neil Stevens, who some spent two years working out in Canada for the company, “commuting” back to the UK office about every two weeks.
This exhausting schedule did not diminish Stevens’ enthusiasm for the company and, now based permanently again in the UK, he says the most exciting times are to come.
Next year, Canada Life demutualises and, with assets freed, is set to become one of the most acquisitive and aggressive players in the market.
Canada Life is located in Potters Bar, a small but affluent town in the part of Hertfordshire which borders north London. The company is the town’s largest employer with 1,000 staff based in two adjacent offices. And its buildings are prestigious, with marble entrances, a waterfall and vast amounts of foliage.
Clearly this is a company with plenty of financial clout – and this is reflected in excellent financial ratings for claims paying ability. But Canada Life is also a well kept secret.
To date, it has steered clear of high profile sponsorships or advertising campaigns and, indeed, until six years ago, had no marketing department.
Instead it looked to market its range of products through a direct sales force and IFAs. The current split is 64% through the intermediary channel and 36% sold direct.
While it offers a range of investment products and pensions, protection is of key importance and the company is keen this message reaches as many IFAs as possible.
As part of its expansion plans, Canada Life sees growing IFA sales as vital and it has invested in a strong team of specialist intermediary administration and sales staff.
IFAs receive back up from a team of regional consultants, with six specialists dealing with the group market and 60 giving support for the individual sector. These are based throughout some 50 regional offices in the UK.
Canada Life was in the news six months ago when it bought Albany Life, a company which was also based in Potters Bar. There were redundancies, but most of these were voluntary and many Albany staff have moved into Canada Life’s offices.
The dust is now settling following the takeover – and Stevens says there remains space in the existing offices for further growth.
At the helm of Canada Life is Ian Gilmour, the company’s general manager who joined from Scottish Mutual last June. While he is fairly new to the company, he is already credited with driving forward the expansion strategy. And Stevens points out that while the head office is in Toronto, the running of the UK operation is managed over here.
Another new addition is Diana Harding who joined from Gan Life. She is already well known to many IFAs from her previous role, and has responsibility for individual sales of protection products.
She is currently involved in the development of a new individual critical illness product. This will make use of the best features of the former Albany Life product and the existing Canada Life contract. Harding admits that the present two products are adequate, but that neither is exceptional in its field, whereas the new launch will be among the most competitive in the market.
No insurer wants to say its products are cheap, but Canada Life is keen to emphasise that it regularly comes top of surveys for its income protection policies, which typically work at one per cent of salary. Harding recently announced cuts of up to 33% in its term rates affecting level, renewable and mortgage protection products. This meant that a 25-year-old non-smoker would pay £7.50 a month to protect a £100,000 mortgage.
The group protection side of Canada Life is headed up by Jim O’Driscoll. He says the company has a flexible approach to the occupations for which it provides cover, including blue collar workers and those considered more likely to claim, such as members of the police force.
Its underwriting is thorough and the company does not pretend it offers the fastest turnaround in quotes. While its underwritten business is in profit, the company also has a good reputation for claims and has had to deal with some major ones in the past, including those killed in the Piper Alpha oil rig disaster.
Stevens believes there is also much the Government can learn from Canada Life’s approach to claims handling, in particular for those claiming on income protection policies. The privately insured sector, he comments, has a far better record in helping people return to work.
Learning curve He believes that in the future its experience in managed care such as retraining could be useful to the Government as it seeks to tackle the massive welfare bill. And as Harding emphasises: “People often don’t realise that a claimant is more likely to be successful with an insurer than they would be applying to the state for assistance.”
As far as marketing and promotion goes, Canada Life is focusing on backing local charities and events, such as sponsoring Welwyn rugby club, backing a local sports centre and providing a garden at a home for retired people, but it has also been involved in some big name activities.
Two years ago, it provided the financial backing for rowers Matthew Pinsent and Stephen Redgrave who won gold medals for Britain at the Atlanta Olympics.
Even though rowing is a minority sport, the heroic duo were disappointed on their return to find there was no welcoming at the airport or once they were home. This was later put right when Canada Life heard of their treatment and held a celebration party for them at Potters Bar.
For the future, a major branding strategy is planned which will help raise awareness among the public and key intermediary sectors such as employee benefit consultants.
“In research, most people identified there should be a company called Canada Life, but they are not likely to know that much about us,” says Stevens. But with expansion at the fore of its business plans, it seems likely that over the few years, Canada Life will be very much in the news.