Insurance industry must improve whole claims process

Insurers and advisers need to work harder to improve the claims process for policyholders, the life office relationship director for Lifesearch has claimed.

Speaking to FTAdviser, Emma Thomson said the industry needed to do more to “a lot better in terms of promoting what we do as an industry to help thousands of consumers in paying out money to them when tragedy strikes”.

Ms Thomson said not only do people not know the options “open to them” but also that clear claims statistics were important for the end consumer and advisers.

She said: “There are some anomalies between insurance companies and this may affect the data slightly.

“However I believe overall our payout rates are high and even if the methodologies were changed, we would still have very positive statistics to publicise to consumers and intermediaries.

“That said, the Protection Distributor Group, of which Lifesearch is a member, is currently undertaking a survey to establish between insurers where those anomalies may lie.

“The key thing about data, though, is that it’s not just the full picture. We need to do far better in explaining the impact a claim has on claimants, the reasons for the claim and the experience that consumers have once they have to make a claim. The extra services that claims team can provide are really important.”

“It’s the big picture we need to be focusing on in order to gain consumer trust.”

Earlier this year, FTAdviser reported the Association of British Insurers had changed the way in which it reports on income protection claims, a move hailed by advisers and providers as a step in the right direction towards greater clarity.

In a statement, the trade body stated: “We have decided to change how we measure the percentage of claims paid for individual income protection products, so  this now reflects only new claims received during the year that were paid and declined.”

At the time, Andy Milburn, director of proposition and marketing for Holloway Friendly, called the changed basis for IP claims statistics “excellent news” and the “morally correct thing to do”.

He said: “The ABI and protection people involved in this decision have done a good job, but there is still much work to be done on our industries approach to claims and what we do for claimants.”

As a result, FTAdviser reported that several large insurers, including Aviva and Vitality, were pledging to follow the new ABI claims reporting method for 2016-2017 claims statistics.

This change followed a string of calls from various advisers and providers this year, including Holloway Friendly, to not only bring about a greater standardisation over how claims statistics were reported, but also ways to improve service levels and turnaround times for the end client when making a claim.

In April, Andrew Ward, head of protection of advice for Roxburgh, told FTAdviser: “When a policy is underwritten, it is rare that providers will step away from the guidelines and take a human approach to helping someone get cover.

” A claim can be slightly more rigid in terms of meeting certain criteria and getting the claimant to supply certain information.

“I’ve not seen any provider step outside the box and show the client they are trying to make it easier to claim, even if that is the ethos of the provider.”

Ms Thomson also told FTAdviser it was important for the industry to work harder to improve technology to reach more potential customers – particularly millennials.

“The days of door-to-door sales people going round to sell insurance are long gone. We have to adapt to today’s consumers, especially trying to get younger people into the mindset of buying insurance”, she said.

Ms Thomson added “They will be using their mobiles and apps, so it is important we design easy processes for them and perhaps go further and design apps they can use on their phones to buy insurance more quickly, as some countries do.”

This built on a point made earlier in June by Legal & General’s Mark Holweger, who warned that millennials were in severe financial risk by not taking out much-needed protection.

Overall, Ms Thomson was adamant the industry is moving in the right direction, not just in terms of improving technology and the claims experience, but also in service levels overall to the end consumer.

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