The ability to provide quality customer service has been the Achilles heel of many providers and yet, as far as advisers are concerned, it is a key area where insurers can make a difference to their business efficiency and the service that IFAs in turn provide to clients.
Shortcomings in service cause instant dissatisfaction among IFAs and Money Marketing regularly reflects the latest problems that are brought to its attention. But no one in the insurance industry should ever feel self-satisfied because it was not their company or brand that was involved on a particular occasion. This type of occurrence can have a lasting impact on overall perception of the life industry and this is not just limited to advisers and their clients but can also filter through to shareholders.
Customer service is often used to refer to policy administration but in the 21st Century it means significantly more than this. We are talking about a total service proposition which not only aims to fulfil the short-term goals of the life office but is designed to help intermediaries grow their own businesses through customer profiling, targeting, approach, product solutions and ongoing financial planning to meet changing lifestyle needs.
The leading life offices have taken this on board and the holistic approach to customer service does not just start and finish with the back office but forms the lifeblood of their sales and marketing strategy.
As the IFA market experiences rapid consolidation, the most successful intermediaries are following focused and targeted business development plans. Life offices can help by sharing marketing expertise and providing the tools that IFAs need to develop their strategy in the marketplace. The Raising Standards scheme has also engendered greater consistency of service.
Those providers which own IFA companies are already enjoying the significant benefits of first-hand insight into what makes a successful IFA operation and how providers can best meet their needs. This knowledge will mould their future business development plans and particularly their total customer service proposition.
Thinking about customer service also leads me to reflect on what it is we are really trying to achieve as an industry. The biggest issue that affects us all is the savings and protection gap. The pension shortfall is estimated to be £27bn and rising, the income protection gap alone is in excess of £130bn and this against a backdrop of rising consumer debt.
Countless people in the UK are facing a future of financial hardship and many of them are not even aware of this issue. Collectively, we should be focused on eliminating this threat to the sustainability of our industry, not to mention the prosperity of the nation.
But possibly the biggest impediment that prevents us fulfilling this aim is consumer mistrust of insurers and the financial services industry in general. This is something that the industry must endeavour to overcome through better communication, product information and providing genuine quality of service to customers.
Many life insurers, including Aegon UK, have unflinching confidence in the ability of the IFA industry to help bridge the savings and protection gap. In an environment where most people have only a sketchy grasp of how financial products and markets work, there is a need for greater education and advice and IFAs are ideally placed to deliver this.
As providers, we must work with IFAs to smooth the path and help them provide high-quality service to clients. A quality total customer service proposition from providers is a vital link in reducing the savings and protection gaps and we should all work towards this.
Peter Dornan is director of group businesses at Aegon UK