The payment of claims is the key purpose of all of us working within the protection industry; enabling people to receive financial support when tragedy strikes.
Focusing on the outcome at claims stage should underpin all the decisions we make, from product design to providing the right advice, to shaping the claims process itself.
The last few years has seen us become much more transparent when it comes to claims. The publishing of insurer claims statistics has been a hugely positive move forward. It has given advisers data to back up their recommendations.
It has educated them about the value of protection (it was not just consumers who were dubious about payout rates). It has provided knowledge about why the minority of claims are not paid. It has helped to build trust.
Yes, we still have a way to go to improving consumer awareness of our high payout rates, and we know not all insurers measure their claims in exactly the same way. It is not a perfect situation, but what is? The pros hugely outweigh the cons.
Meeting the consumer challenge
With all this in mind, it was astonishing to hear towards the end of last year that some influential people believe we should be less open with our claims payout rates. That they regret the decision to publish by provider, preferring instead to have industry-wide statistics as per the group market. For goodness sake. The group market should follow the individual market, not the other way around.
This opinion seems to be prevalent among reinsurers rather than insurers. Yes, those firms that have no direct interaction with consumers. That is very telling. Reinsurers have a huge impact on the design and price of protection propositions and they should make more effort to understand the needs and opinions of consumers, and indeed intermediaries. The people on the front line of purchasing decisions.
Some reinsurers are now making efforts to engage more with distribution, which is great, but this disappointing episode demonstrates the real need for them to properly understand and focus on the people aspect of our market, not just the technical one.
The point about not always comparing apples with apples is fair but, rather than reduce transparency, let’s try and fix the problem. Let’s understand all the issues and find a means for all insurers to measure claims in the same way. It is something the Protection Distribution Group will be working on.
Overall, much more still needs to be done to improve awareness of claims among intermediaries and consumers. Because, while there are certainly some changes needed to improve the claims experience, there is a lot of great work already being done by these teams. Claims payout data is just one part of the story. And our claims story is one we should be telling.
Emma Thomson is life office relationship director at LifeSearch