Tim Evershed examines how the protection profession is enhancing its service and improving customer experiences
Recent years have seen a subtle shift in focus from the protection profession as it looks for ways to enhance its services and improve the customer experience for its policyholders. Insurers are being proactive in this area, with a number of new initiatives underway. It is a strategy that recognises that insurance must be more than merely transactional and, if executed successfully, has the potential to open up new opportunities.
In the past, the protection profession has focussed on product innovation, effectively adding more features and options. Although insurers continue to offer many policy add-ons, which have led to positive customer outcomes over the years, it is also making the process of purchasing, and claiming against, insurance ever easier, simpler and quicker.
“The majority of consumers do still buy in the same way and receive communications from insurers in the same way, using the same language. The amount of documentation that comes with each policy can be overwhelming and daunting,” says Jo Miller, co-chair at the Income Protection Task Force.
“There is an opportunity to increase the industry’s presence in the generations of consumers that are coming through. The way we do things at the moment is not necessarily appealing to some consumers. It certainly wouldn’t appeal to the younger consumers coming through.
“The chance is to be smart and make the experience of applying for insurance much better. Things like using genomics to assess risk and using data. We have tons of data everywhere, so we should be offering personalised pricing. We need to make it a more attractive proposition, we have seen that in other areas of insurance – like motor,” she adds.
Improving the experience
One insurer that has recognised the need to improve the customer’s experience is Royal London. The firm’s ‘Underwrite Later’ offering focuses on speeding up the underwriting process, which has in the past seen delays due to the wait for medical information on applicants. Delays that have only been made longer by the pandemic.
Royal London says that it offers full cover with no standard exclusions for clients who start their cover through Underwrite Later. It says that currently 49% of business protection applications are able to start after an initial assessment, but with Underwrite Later, this could increase to 93%.
Other areas where the profession could leverage its data resources better include the ability of policyholders with pre-existing conditions to change provider more quickly and easily.
Work to reach young consumers, aged 18-35, is also progressing, with insurers and advisers trying to create information and products that are accessible and fit with the younger generation’s lifestyles.
Kevin Carr, CEO of Protection Review, says: “Traditionally insurance is a grudge purchase. You don’t get excited about buying insurance. It is driven by your need, not age, gender or budget. Have I got a mortgage? Have I got dependants?
“The industry needs to reach wider audiences and it needs to reach younger audiences who can buy this when they are young and healthy, and it’s cheap. Even if we reach these audiences, which is a challenge, do we then have the products and processes to do that with confidence across the industry?
“There are good examples of companies trying to do that with different marketing, through social media or other advertising channels – getting away from decades-old norms of how life insurance gets advertised.”
Claims are key
The claims process is key to the customer’s experience, particularly in terms of the speed at which it is handled. Alan Lakey, director at Highclere Financial Services, says:
“At the claims stage, the insured wants their money double-quick. They might have a condition that they can get private treatment for, or maybe they need to go abroad for specialist treatment. If someone is terminally ill they may want to get their affairs in order, so the quicker they get their money the better. But sometimes the process falls down there and sometimes the insurance companies don’t do themselves any favours.
“There are lots of aspects to the consumer experience but the good news is that it is gettingbetter. Around 93% of all critical illness claims are paid, with about 1%-1.5% not paid due to misinformation at the outset and the rest due to not meeting the claim definition. About 15 years ago, the number being paid was 75%.”
There are good examples of companies trying to do that with different marketing, through social media or other advertising channels – getting away from decades-old norms of how life insurance gets advertised
According to Mr Lakey, a number of insurers have now agreed that as soon as a claim comes in, they will immediately pay £10,000 to the estate so that the various funeral and other incidental costs can be met. This happens prior to underwriting the claim itself.
Also, now when LV= receives a cancer claim it immediately pays out £1,000, regardless of whether the claim is accepted. If LV= turns the claim down for some reason, the person still keeps the £1,000.
According to Mr Lakey, these are the kinds of sensible measures that can placate and encourage consumers on their journeys while also bringing real benefits to insurers.
Tim Evershed is a freelance journalist