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Emma Thomson: We need to get behind annual protection statements

Getting it right will improve retention rates, consumer trust and, most importantly, help more clients and their families claim.

AIG and Royal London have recently made announcements to support the issuing of annual statements.

The F&TRC Protection Forum, alongside intermediaries and more recently the Protection Distributors Group, have long called for better communications with existing customers to improve policyholder trust, engagement and awareness. So to hear two big firms are making progress in this area is welcome news indeed.

Discussions around protection statements can incite very mixed opinions. There are some who feel this is risky. They are worried that reminding clients they are paying premiums will lead to plans being cancelled.

Meanwhile, some distributors object to insurers sending out protection statements directly to clients but would not do the job themselves either. They would rather the client receive nothing because they do not trust the insurers.

Both standpoints should not simply be dismissed. But the benefits of protection statements far outweigh the negatives. More importantly, it is the fair thing to do for consumers. And remember, not every client has an intermediary so insurers must have a part to play.

Overall, there is too much insurer and distributor focus on getting new clients through the front door, and not enough attention being paid to those wandering out the back. If we do not address this issue of better servicing existing clients ourselves, the regulator will. Let’s not take that risk.

Policyholder communications can benefit all parties. Clients often forget exactly what their insurance covers, leading some to feel it is worthless or, worse, not make a claim when they could. So let’s remind them what their policies do.

Insurers are now offering many great ancillary benefits, including discounted gym memberships, free wills, virtual GP services and various helplines. These all add value, so let’s remind clients about these extra benefits too.

Policyholders should also be reminded to ensure cover remains suitable. Changes in circumstances or improvements to products could mean they are leaving themselves exposed. Protection statements that encourage clients to review cover would minimise this risk and improve trust.

But we need more than just a basic protection statement emailed annually. Information needs to be consumer friendly and appealing. We also need systems that offer clients and intermediaries real-time information about policies and flexible products that enable them to upgrade easily rather than re-broke.

And insurers need to respect the client/intermediary relationship, not undermine it. We all can make changes to better support our existing customers. Getting it right will improve retention rates, consumer trust and, most importantly, will help more clients and their families claim.

Emma Thomson is head of customer care at LifeSearch

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