Data divisions
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The FSA has published a raft of data on complaints between 2006 and 2008 and Dan Waters said: “Transparency is an important regulatory tool. Publishing this information will mean consumers and firms can see how many complaints the industry receives and how it deals with them.”
The problem is, as 72.3 per cent of people know, you can make statistics say anything. It is all in the interpretation.
For example, if you were to tell a client there were around 38,000 complaints relating to financial advisers in 2008, they would probably consider that a lot. But if you told them that complaints about financial advisers in 2008 numbered less than half of those in 2006, they might see the picture being a touch rosier.
Similarly, there has been consternation in the protection world about our corner of the industry being lumped in with general insurance, so it becomes hard to discern from where the complaints originate. When I started selling protection some years back, we referred to a long-term income replacement product as permanent health insurance but in recent years this phrase has been largely ditched for the slightly more self-explanatory moniker of income protection.
The complaint data, though, has a section referring to income protection and another referring to permanent health. This has led to commentators wondering if the income protection figures relate solely to complaints about accident sickness and unemployment and payment protection insurWhy didn’t the regulator ance products (which would explain the sharp rise in this type of complaint), with perm-anent health relating just to complaints about long-term “proper” income protection plans (a reassuringly low number, falling from 2007 to 2008).
This kind of ambiguity is unhelpful and a simple division between the GI and protection figures would make the distinction clear, although some uniformity between providers might help the regulator and others, since ASU and PPI firms have used the income protection name to market their wares (to the chagrin of some), and each protection provider uses a different name for their version of the old PHI contract.
Some good news for most of us can be found in the numbers, with critical-illness-related complaints falling for the third year in succession and complaints relating to financial advisers down again also.
We should not get too hung up on the contents of this report. Financially savvy clients will make their own judgements about the validity and importance of the figures but they are not the problem when it comes to the sale of protection. The protection gap is made up mainly of those who simply are not aware of the need for, or scope of protection products - let alone the difference between permanent health and income protection.
It is these customers we must reach and while we may balk at being grouped with the GI sector in this instance, we might do well to learn from some of their successes.
Phil Jeynes is key account manager at Direct Life & Pension Service
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