Opt-outs triggered by smartphones say Legal and General!

Speaking at a private conference for First Actuarial staff, Adrian Boulding said that Legal and General‘s clients were enthusiastic about their staging experience and he went on to suggest that members were much more ready to get information and transact digitally than his firm had anticipated.

Boulding suggested that it was this member engagement that was driving the enthusiasm of  companies staging in 2012

Though Boulding declined to quote specific numbers across the book he confirmed that some 300,000 people were now enrolling with L & G from Asda, Sainsburys, M&S, Boots and the Co-op.

Boulding said that the numbers of members interacting with their pensions was  considerably higher than expected and these interactions had primarily been digital. The biggest surge in members finding out (and opting out) of pensions had been via handheld devices – typically iPhones and similar devices.

Feedback from members opting-out digitally was that this was the only way they could feel sure that the opt-out really happened. Ironically it seems members as much as employers and providers have bought the concept of “straight-through processing! I doubt that many guessed that the trigger for self-service was distrust of the provider or employer to manually process the opt out!

The uptake of digital self-service bodes well for insurers whose highest unit costs are associated with having to manually process member instructions

Boulding’s bullish assessment of his firm’s success confirms anecdotal evidence that it is they , rather than NEST, who have scooped the pool.  L & G , according to Boulding, have been prepared “to take the lot” insuring the pensions not just of the more affluent employees but those whose contributions may initially appear “nugatory”.

If those with small contributions are prepared to do things digitally, it may be that insurers like L & G will be able to deliver product deeper and cheaper than we had previously supposed though the suspicion will persist that self-service does more for insurer’s margins than their terms!

Listening to Boulding one was struck that L & G and not NEST are in control of  the agenda.

Reports from pension managers  staging this year confirm that they are happy both with staging and see L& G as a “safe pair of hands. One manager using the firm claimed L & G used “simple process without bells and whistles which worked”.

Boulding was not however complacent, pointing to the bulge in the bell curve that means some 30,000 schemes will be staging enrolment in the second three months of 2014. His view is that the pensions industry will need to move from the highly bespoke solutions that have been used by employers  like Marks & Spencer‘s to simpler, less expensive approaches.

This is very much in line with our thinking. Not only are we going to need to see streamlined products and support services, we are going to need to see streamlined purchasing decisions.

My take from Boulding’s talk and conversations before and after is that there is still much to do by those looking to project manage installations and provide the ongoing governance to smaller schemes. These schemes will need to comply, invest and communicate to the same high standards as larger schemes but they need to do so with light pockets and limited operational and strategic resource.

Despite these warnings for the future, I suspect the majority of delegates left the meeting uplifted by a message that reinforced Steve Webbs’ guarded  triumphalism.

Auto-Enrolment is working – so far!


The Telegraph have picked up on this blog and produced an interesting variant  – read it here , For General Info;- as well as not being an actuary I am not head of First Actuarial. As if…

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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6 Responses to Opt-outs triggered by smartphones say Legal and General!

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