A prescription for change

Mike Izzard wants the Association of Medical Insurance Intermediaries to be a force for change. The new AMII chairman tells John Greenwood how he intends to make it happen

Mike Izzard, the new chairman of the Association of Medical Insurance Intermediaries is a man on a mission to push the interests of medical insurance advisers up the agenda. He has a clear strategy for developing the association into a force to be reckoned with, believing the time is now right for a strengthened PMI body to start pushing the healthcare agenda with real conviction.

Voted in as chairman last month, Izzard wants to see a step change in the association’s profile through an increase in member firms, particularly influential larger organisations yet to join, increased professionalism through a new AMII qualification and a significant raising in the body’slobbying activities.

“The future I envisage for AMII is an organisation that is less introverted and more visionary. I want to get to the point where if there is a story on the TV about private medical insurance, they will come to AMII as a matter of course for comment from the industry,” says Izzard.

Izzard firmly believes that the time is coming when the logjam that is the political parties’ refusal to embrace private medical insurance as a solution to the exponential demands on the NHS will have to break. With the consensus of the NHS as sacred cow coming under strain, the timing is ripe for advisers to spur a national debate on how the private sector can help address the spiralling health costs of an aging population.

“Every political party has to take on board the fact that a good, efficient NHS needs a good and efficient private healthcare sector. Without it, it cannot cope,” says Izzard. “It is an economically bullet-proof argument that giving tax relief for private medical insurance will help the Treasury in the long term. Tax relief of around £120m on 2.5m individualpolicies would save possibly £1.5bn in resources. It is practical and makes sense to make people set money aside for their own healthcare.

He believes a Tory government could see a radical change in the way PMI is treated, although we may have to wait until after the election before we see it. “At the moment the only thing stopping parties looking at this issue is ideological dogma. That will no longer be the case if there is a change of government. It will perhaps be too controversial for the Tories before the next election but afterwards yes, I can definitely see them looking at a change of policy,” he says.

With the next general election likely to take place in two years time, Izzard’s aim is to get AMII into the sort of shape necessary to take on these big picture ideas by the time his own term of office comes to an end in May 2010.

Part of that strategy involves getting some of the big players yet to join AMII to come on board. With around 75 firms on its books, ranging from big employee benefit consultants to small brokers, AMII already represents a significant proportion of the UK’s health insurance intermediaries. But there are some firms whose absence is notable. Getting firms such as Mercer and Aon to join is one of Izzard’s aims for 2008, believing that their presence would give the organisation’s message an added impetus at a key time in the industry’s development.

“We want to be taken seriously as a body, which is why my message to the big intermediaries who are yet to come on board is ‘Come and join us’,” says Izzard. “I appreciate it is a leap of faith for some of these larger firms, but I would suggest they try it for a year, and see how it goes. They have nothing to lose, but together we have much to gain.”

Paraphrasing John F Kennedy, Izzard sees growing the wider market through a unified adviser front as essential for all players. “Ask not what AMII can do for you, but what you can do for your industry,” he says.

Izzard says he wants to build on the foundations created by Phil Taylor, managing director of Preferred Medical and the outgoing AMII chairman, and admits he now realises how much work he and other AMII representatives have put in, while still managing to run their own businesses. “I now know how much time my predecessors have given to the body for which members should be extremely grateful.”

Getting bigger players on board is not the only way the body’s membership is being broadened. “We negotiated to get authorised representatives into AMII and now I want to get an AR on the committee of the organisation,” says Izzard.

Professionalism is another issue that will be addressed during his term of office, with AMII’s own industry qualification soon to go live, something that Izzard is taking a hands on role in bringing to fruition.

“We are in preliminary talks with the CII who will invigilate on the exams and create the syllabus. This is an issue that Wayne Pontin of Jelf Group and I shall be taking forward,” says Izzard.

“The CII will set the syllabus and the questions. It will be a computer based module. You will log on online and have to fill in answers to the questions within a set time-period. For new joiners it may be that they have to sit the exam in a room invigilated by the CII. The full details of how exams are to be taken are yet to be determined but we will be laying our proposals before members in the coming months,” he says.

But what is certain is that Izzard sees the lifting of professional standards through these exams as more not only a way to approach issues raised by the retail distribution review before it touches the sector but also to raise the industry’s reputation as a whole.

“We then want any new AMII members to pass that qualification pretty damn quickly, while existing members will be given two years to finish it,” he says.

Izzard also wants lobbying activities with the regulator and providers to be raised, particularly on issues such as the shape of commissions, provider service, dovetailing private sector products with state provision and treatment of cancer patients. He also sees further scope for a more efficiently operating market in PMI by changing practices in the publication of claims history and wider issues of product development.

“We want AMII to open up a greater dialogue with the regulator to improve the way we can influence it. We shall be getting an insurer representative coming onto the committee, and believe that by working together we can improve things for everybody,” says Izzard.

While he is moving to further embrace ARs within the organisation, Izzard has some concerns at the pace of consolidation in the market, both in terms of the way independence could be threatened and also the restrictions on choice that fewer providers bring.

“I don’t want to see much more provider consolidation. Obviously some that are small will face problems if we have a tough recession, but we don’t want to see the big firms getting much bigger,” he says.

“As to the trend of insurers buying distribution, I don’t think it’s too healthy. While consolidation will not stop in the long term I think that we have seen the end of a flurry of buying out businesses that was hastened by the abolition of taper relief with owner managers rushing to sell up ahead of the April deadline for the new capital gains tax rules,” says Izzard.

“I think some companies think that if they buy intermediaries then it will mean they lose their agencies and then become worthless. But that hasn’t happened with the advisers that Axa have bought,” he says.

He is proud, however, of his own firm’s independence, and the fact that it has agencies with more insurers than possibly any other intermediary on the market.

He is a full supporter of commission disclosure. “The idea will concern some brokers. But under Treating Customers Fairly it is implicit that we should disclose commission. I predict that in future commission will be more level than it is now. We get paid very well for initial business but it is very difficult for us to do a proper job of renewing a piece of business at 5 per cent renewal.”

However advisers in the group PMI sector are remunerated, Izzard is predicting tough times ahead and his assessment of the current state of the market is a bleak one.

“There has been a recession in private medical insurance for a year now – companies are going bust out there, and there are also businesses with American parents that are filing for Chapter 11 bankruptcy protection that are feeling the pain,” he says. “No-one is immune from this economic situation and AMII members have got to be prepared for it.”

“I remember the downturn of the early 1990s, which was followed by the abolition of tax relief on individual policies. There was no growth for years back then, and it is only in the last four or five years that the industry has had something of a purple patch, he says. “This has been prompted by innovative new offerings from insurers like PruHealth and National Deposit. But I think we are now in for tougher trading conditions in the private medical insurance sector as other sectors feel the squeeze.”

Izzard believes strength in numbers is the way to get the PMI adviser’s views heard through what could be a difficult time for the sector. While the economic fundamentals may not look fantastic, the door to a greater role for private sector medicine is waiting to be pushed open, he believes. Medical insurance intermediaries know how to make the market function more efficiently – Izzard wants them to come together to make it happen. n

All about Mike Izzard

“Many IFAs are hung up on pensions and investments but if they come to us and take our advice we can open up new revenue streams that can give them access to enhanced commission deals”Izzard left college and trained as a chartered accountant for eight years. 90 per cent of the way through the exams he had his ‘head turned by a female, which destroyed my interest in it’.

Ran an electrical engineering company, where he first learnt about selling.
1992 worked with Norwich Union Healthcare on a self-employed basis.
1996 joined MIA
1996 set up Premier Choice Healthcare. The firm now has 24 full time members of staff and a further 50 self-employed individuals taking advantage of the firm’s ‘Healthcare in a Box’ offering.

“This is an initiative whereby we support IFAs and general insurance brokers and mentor them through the placing of PMI business. By dealing through us they are able to offer bespoke products and they can also get advantage of the same improved commissions that my firm have agreed with providers,” says Izzard.

He sees a wider role for this sort of arrangement across the adviser community and believes some firms are missing a trick by not covering off PMI with their group clients. “Many IFAs are hung up on pensions and investments but if they come to us and take our advice we can open up new revenue streams that can give them access to enhanced commission deals,” he says.

Out of the office

Married to his wife Judy for 31 years, Izzard has two daughters, aged 21 and 19.

Izzard’s love of music is apparent – his regular trips to London often coinciding with rock and pop concerts and musical theatre performances on the West End stage. “I usually make sure I go to a gig of one sort or another at least once a month.”

He is also a keen motor racing enthusiast and his company, Premier Choice Healthcare, sponsors a car in the Clubman’s Championship, in the Formula 750 Motor Club.

The 750 Motor Club is an auto racing club set up in 1939 by fans of the Austin 7 and promotes low-cost racing for enthusiasts at events around the country.