Lack of demand leads Lloyds Banking Group to cut its standalone protection advice service via its bank branches
I have never been a fan of buying protection insurance through a bank due to the various reasons, including the fact you tend to be only offered the banks “tied” products. Banks may have a captive market but the prices they sell for protection insurance seem to me to be inferior in quality but priced at a premium when compared to products available off the high-street.
So, it come as no surprise with the growth of the internet and consumers seeking advice off independent financial advisers that Lloyds has announced it would no longer offer customers access to protection advice through its Halifax, Lloyds or Bank of Scotland branches.
However, Lloyds will still continue to offer protection policies as part of mortgage sales but as part of these changes some 1,250 staff jobs are at risk of redundancy.
This new announcement follows the bank confirming earlier this year that it plans to reduce its workforce by a further 9,000 over the next 3 years, closing an estimated 150 branches from the combined networks of the Lloyds, Halifax and Bank of Scotland brands.
Johnny Timpson, financial protection specialist and planning manager at Scottish Widows, which had offered direct protection sales as part of the Lloyds Banking Group, said the move was a bid to change interaction with customers based on changing needs.
He said: “At the moment the majority of our customers are buying protection policies through the mortgage. We have mortgage advisers who make protection and general insurance recommendations.
“We also have advisers who are doing the non-mortgage piece, we made the decision that protection distribution in the branch network will only be with a mortgage. With a customer who has a non-mortgage need, we’re going to be directing them to the Money Advice Service so they can review their needs from there or if they want to speak to Scottish Widows direct.
“This comes back to the strategic statement announced and a big move towards digital. The number of consumers coming to branches has significantly reduced, we have people coming to us using their mobile, tablet and so on. In the old days people would come in, this isn’t happening anymore. At some point we will launch a digital protection offering but in the meantime customers with non-mortgage needs will be referred to MAS and financial advisers. The customer is redefining how they want to engage.”
Scottish Widows is relaunching its protection proposition into the intemediary market – expected in 2015.
The bank said in a statement: “Lloyds Banking Group is committed to working through these changes with employees in a careful and sensitive way.
“The group’s policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group.
“Where it is necessary for employees to leave the company, it will look to achieve this by offering voluntary redundancy. Compulsory redundancies will always be a last resort.”