Loyalty is something to be treasured and rewarded, and I think the protection industry could hugely profit by demonstrating lots of it.
There is no hiding from the fact that a significant number of consumers have no protection in place, so new business is vital. But looking after existing clients well is the right thing to do too. It is wasteful to attract new clients through the front door while at the same time letting existing ones wander out the back.
We might not be the most innovative of industries but there are regular improvements to products, especially critical illness cover. That is to be welcomed to help more people claim. However, product enhancements rarely benefit existing plan holders.
There are a few exceptions (British Friendly being one to recently offer an improvement to existing clients) but this is far from the norm. What’s more, somewhat ironically, given that insurers hate the idea, it forces client-focused intermediaries and informed clients to re-broke in order to benefit from the improvements, as we get situations where clients who took out protection a few years ago cannot claim for something a newer customer could.
This only leads to consumer distrust and negative press stories. There are pricing and reinsurance arguments to factor in but there should be more effort to look at how these enhancements can be offered to existing policyholders too.
Systems, processes and call management are also not as good for existing clients. It is often faster to submit a new application online than utilise a guaranteed insurability option where there is supposed to be no underwriting. Madness.
But the effort is worth it. Through our own approach to look after existing clients (whether that be to help with failed direct debits, discuss market improvements or ask if circumstances have changed) an unexpected consequence is that we are identifying those who could have claimed but had not, either because they had forgotten about the policy, could not remember exactly what it covered or did not know their partner/parent even had it. One in nine of all the claimants we have supported since Q3 last year would not have known they could claim had it not been for our call to them.
In insurance, serving clients fairly always costs more than being unfair but we have all moved way past being blocked by that actuarial approach. So why not introduce better technology to help intermediaries service policies in force, regularly reminding clients what cover they have and, importantly, the value of it? And why not design flexible products where, for example, clients who bought life cover alone six month ago can easily add on some critical illness cover and income protection without being fully underwritten again. Vitality recognises loyalty through discounts and rewards, and more of this approach would be welcomed too.
We all need to support our existing clients better. After all, getting it right will help more people claim, which is surely the best reason there is to do it.
Emma Thomson is life office relationship director at Lifesearch