Payment protection insurance (PPI) has had a bad rap of late. Mis-selling of PPI by some banks, increased scrutiny by the financial regulator and consumer uncertainty over whether they need the product in the first place have all combined to tarnish the product's image.
For Dubliner Bob Brannock, it just increases the challenge in his role as chief executive of Genworth Financial's global payment protection business.
One of his first priorities is demystifying the product for consumers - not an easy task considering the criticism payment protection attracted when it emerged in 2005 that 65,000 Bank of Ireland personal loan customers had been overcharged on the product since 1989, forcing the lender to repay €18 million, including interest, to customers.
It was not the first scandal involving what is for the industry a lucrative product. A year earlier it emerged that AIB had charged 570 mortgage customers for this optional type of insurance without first asking the customers if they wanted the cover.
Incidents such as these led the Irish Financial Services Regulatory Authority to include tough new rules governing the selling of payment protection insurance in its consumer protection code, published last July.
The financial regulator said last year it suspected that as many as one in two consumers who took out payment protection insurance believed it was compulsory when getting a loan.
Genworth, which has some 300,000 policyholders in Ireland, welcomed the new rules, according to Brannock. "Anything that makes distribution of our product fairer for the consumer is good for us," he said. "In the UK and Ireland, we were seeing products getting a lot of bad press because of the way they were sold."
Genworth's PPI business, a division of US insurance giant Genworth Financial, does not sell directly to consumers but operates through other financial institutions. In Ireland, it sells through eight institutions, including Bank of Ireland and EBS.
Brannock believes PPI - which aims to help people meet payments on debt, including mortgages, personal loans and credit cards, in the event of an illness, sudden unemployment, temporary incapacity, permanent disability or death - is a valuable product in an Ireland where the personal debt burden is growing, buoyed by rising interest rates.
"From our perspective, there is a big gap here between personal indebtedness and personal protection," he said. "People want protection during unemployment, accidents and sickness. This is a big growth business.
"A lot of people in the workplace today have never known anything to be other than great. But we have lived through big economic downturns, where we saw loss rates of 400 per cent in the Eighties and early 1990s.
"Mortgage rates are increasing and people are worrying more about repaying them. We see mortgage protection as a growth area.
"People are starting to realise that they need coverage for unemployment too. Take a couple where just one person is working. If the company they work for is merged with another, they find themselves out of work.
"The appetite for this type of product is very strong in Ireland and the UK."
Sales of Genworth's payment protection products rose by about 22 per cent in Ireland and continental Europe in the second quarter, helping to boost per-share earnings at parent company Genworth Financial by 13 per cent from the same period a year earlier. It is a major player in the industry in Ireland.
Genworth Financial, a former General Electric subsidiary, is the world's fourth-largest publicly traded life and health insurance company, operates in 24 countries and employs 6,900 people.
It generated revenue of $10.5 billion (€7.9 billion) last year and boasts about 15 million customers across the world.
Brannock oversees a business that has 11 million policyholders and accounts for almost a fifth of the parent company's annual revenue.
The division has a presence in 18 countries and added 46 new distribution partners last year, bringing the total to more than 200.
New technology will enable the business to enter a new country every three to four months, compared to a previous timeframe of six months, according to Brannock.
The Trinity College graduate divides his time between London, where the business has its headquarters, and Co Clare, where he lives with his wife and five children.
More than half of the PPI business's 650-strong workforce is based in Shannon, which handles some 2.8 million calls a year and handles all of Genworth's financial processes and payables received.
Before being promoted to chief executive, Brannock served as sales and marketing director for about three years. In this role, he accelerated sales growth across Europe and acted as a key driver in expanding the company to new regions such as Greece and Poland.
Before this, Brannock was chief information officer and was responsible for setting up centres of excellence for operations, captive management services and systems development in Ireland in 1997.
He first joined GE Capital after it acquired a controlling interest in Guinness Peat Aviation in 1993. Brannock had been based in Shannon with GPA since 1989.
Brannock's years of experience in Shannon has led him to the belief that the west of Ireland is still suffering a dearth of investment. "The infrastructure has not kept pace with the growth there and is very eastern-centric," he said.
"It needs significant investment to sustain the jobs we want to put there."
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