Defaqto: Helping clients ‘make smarter financial decisions’

John Milliken is CEO of Defaqto, a company many associate with issuing Star Ratings, seen on the bottom of advertisements as a mark of reliability to boost consumer trust. 

But is there more to Defaqto than meets the eye? You bet. We speak to Milliken about ways the company is helping its clients make smarter financial decisions, including its support for insurers. 

We’ll also look at Milliken’s career to date, and even ask his preferred company of castaways if trapped on a desert island! Want to know more? Read on to find out. 

Most people probably associate Defaqto with Star Ratings. Is there more to the business than this?

Absolutely: we use data, consumer insight and technology to help everyone make smarter financial decisions

• Our Star Ratings provide consumers with expert guidance at a glance;
• Matrix – our whole of market financial product database helps insurers and other providers stay ahead by showing how their products stack up against competitors, enabling them to design, market and distribute products more effectively; and 
• We also have the most widely used financial planning tool in the market, which is used by about 30% of financial advisers.

How are insurers using Defaqto? 

Insurers use our Star Ratings to help their customers select the most suitable insurance policies, and they use a tool called Compare to enable customers to do side-by-side comparisons of policies – usually as a part of their sale and retention processes. 

Insurers, brokers and underwriters also use Matrix to perform competitor analysis and to highlight areas of differentiation for their marketing.

Through regular discussions with insurers, our Star Ratings criteria evolve every year to stay ahead of market developments. 

In addition, we regularly survey consumers so that we can best understand their policy priorities on a segment-by-segment basis. We have recently updated Matrix so that insurers can perform this analysis themselves.

Are there any ways that financial services firms/insurers use your services that surprised you when you noticed it, or ways in which their usage is evolving over time?

I recently had the pleasure of meeting a broker who explained that they regularly use a version of Compare on an insurer’s website to find and validate policy recommendations that they make to their customers. A really innovative approach, and exemplifies how trusted this service is, but I’m not sure how the insurer would feel about this minor infraction if they found out! 

Describe your role and your background. How did you get to this point in your career?

I don’t think I am that unusual in never really having laid out a career plan, but I have purposely tried to work in interesting, growth industries - mobile telecommunications, mobile banking, data and AI/machine learning - as these are typically areas where there is innovation and where you can gather knowledge and experience that is applicable elsewhere.

What did you want to do as a job when you were a child?

I wanted to be an architect – but unfortunately for me, my sister got all of the creative talent!

If you have any words of wisdom for your 8-year-old self, what would it be?

Lighten up! I used to take life very seriously as a child.

If there’s one piece of technology you couldn’t live without (besides your mobile phone), what would it be?

Bluetooth headphones – I like to listen to lots of music, podcasts and audiobooks, particularly when I am travelling.

There’s a lot of talk about what sources of information consumers trust when making purchases. Do you think we have lost a lot of trust?

We have conducted a consumer survey about the selection and purchase of insurance in the last few weeks. 

What we found out was somewhat the opposite of a lack of trust; many consumers have limited understanding of the differences between policies and believe that in most circumstances their insurer will simply make good their loss, whatever their policy says.

We all have a job to do in improving consumer understanding and helping them select the most suitable product for their priorities and budget. 

How important is product benchmarking in an increasingly digital age?

The market is moving from being primarily price-driven into one where overall suitability and offering reasonable value for money will become increasingly important. 

Consumer Duty is obviously one major driver of this shift in the market and places specific obligations on insurers to benchmark their offerings.

In the future, the most successful insurers will be those that use the best data, benchmarking and consumer insight to design, tailor and target their offerings at sub-segments of the market. 

We are working hard – today – to build out our datasets to include things like pricing, service, claims, sentiment and sales performance to help insurers on this journey.

What was the last good book you read and when was it?

I am a fairly prodigious reader and usually have more than one book on the go at any one time. Given that we have had an Ashes Series this year, I would recommend ‘Hitting Against the Spin’ by Nathan Leamon and Ben Jones. It’s a statistical analysis of how cricket has developed and is much more interesting than it sounds (if you are a fan of the game)!

What do you get up to away from the office?

Cycling, running, reading (usually history books and biographies), seeing friends and going to sports and classic car events.

If you were trapped on a desert island with three other people, who would you want them to be and why?

Bear Grylls (survival skills), Tom Kerridge (we will want something great to eat) and Jay Leno (great conversationalist – particularly with his knowledge and enthusiasm for classic cars)!

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