Any consumer trust gained over the past year by the critical illness industry has been undermined by bad claims publicity and unhelpful comments from the ombudsman according to Defaqto.
Defaqto says the CI industry did not capitalise on the opportunity to promote the Association of British Insurers’ statement of best practice and left many advisers and their clients inadequately informed about CI changes.
Defaqto says a lack of education is at the root of the problems and that the industry needs to come together to promote a positive image.
Defaqto principal consultant, protection Nick Telfer says: “The future for critical illness hinges on rebuilding customer trust and developing products to meet the modern consumer’s needs. I am concerned that neither the product development needed nor the education necessary to rebuild trust in the product is happening nearly quickly enough. This will inevitably lead to people being potentially left wide-open to the consequences of serious illness.”
The financial research company also criticised the industry for “condition inflation” which has affected the industry in recent years and which Defaqto says can be seen as a “marketing ploy of questionable value to the customer”.
Telfer adds: “The evidence from providers published statistics is that the vast majority of claims are paid and this is the message the industry needs to get across. We believe that rather than providers doing this individually, they need to work together through an industry sponsored campaign to promote the proposition to the consumer.”