It is encouraging to hear insurers such as Royal London and Zurich recently sharing plans for improving communications with policyholders, which include keeping distributors better informed and empowered too.
Protection statements, improved missed premium processes and systems to help manage existing business are welcome news for distributors who want to better support existing customers. These improvements are long overdue but are certainly better late than never.
Getting this area of customer service right will have a positive impact on both consumers and distributors. Regularly engaging with clients will make them feel more valued by our industry. They will be better informed about what cover they have and, more importantly, what they can (and cannot) claim for.
Uptake of under-utilised benefits such as guaranteed insurability options, virtual GP services, helplines and discounts should increase, helping clients to maximise what policies offer and make cover feel better value for money. Advisers can use improved existing policy information to better advise their clients and provide ongoing care. And, dear insurers, this includes notifying us of all claims. More progressive ideas include making policy management more flexible, enabling customers to update their details and even change their cover. If managed carefully, with adviser involvement and no loss of client ownership by the adviser, these initiatives could be very good for consumers.
Some advisers are worried by such ideas and may want to prevent customers from making changes themselves. I agree there is a risk clients may make decisions that might leave them worse off but we also need to remember that not every protection client has an adviser to guide them. Increasing numbers of consumers are buying online themselves. Some clients may become orphan clients. And, let’s be honest, others will buy through firms that are only interested in writing new business.
Even where the client has a helpful adviser, what if the client wants to increase their cover at a weekend but cannot because it has been decided they need advice first, then gets run over by a bus first thing on Monday morning?
As advisers, I feel we have to be realistic about both the advantages and the limitations of the very many and varied client/distributor relationships our industry has, and focus on the best interests of consumers, not ourselves.
As I have already suggested to one insurer, a workable compromise may be to enable clients to amend their cover but also provide a cooling-off period, so to speak. Clients (both advised and non-advised) would be empowered, yet notified advisers would still have the opportunity to undo the changes if they feel the client has made a mistake.
There are clearly pros and cons of both increasing communications to existing clients and enabling them to manage their cover. But supporting changes to help policyholders, regardless of how they have bought, will lead to increased consumer engagement which in turn should lead to more UK families being protected. And market growth would benefit us all.
Emma Thomson is head of customer care at LifeSearch