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Product providers must make it easier to retain business

Emma Prescott
Emma Prescott

Why do some providers make it difficult for us to keep our customers on the books? It is a question we have been asking ourselves more and more.

We have invested time, money and effort into improving our already good retention rates further but some providers make things hard to get clients back on risk.

The situation is even worse when a competitor is involved who is pushing the client to replace our cover with them. A new policy can often be set up in the blink of an eye without any paperwork, yet if we can win the client round, reinstating their original cover can lead to paperwork galore.

Cheques for back premiums, a paper direct-debit mandate and a declaration of health are all common requests. It is not easy convincing a customer to do all this when they can take out a new plan without hassle and without having to pay missed premiums, so often we don’t. We set up a new plan ourselves, sometimes with the same provider but sometimes not.

Some providers have supported intermediaries, back premiums can be paid by phone, direct debits can be reinstated or altered by phone and one provider has already agreed to teleunderwrite DoHs. I am speaking to the rest, asking them to follow suit. It is logical for DoHs to be done this way, given most providers have teleunderwriting capabilities. But some providers are very slow to make changes. This hinders our efforts to retain customers and means their own retention rates suffer. If a provider makes it difficult to reinstate cover, then it is reasonable for the broker to set up a new plan to ensure the customer gets cover back in place quickly.

Good communication is vital. If a premium is missed or a customer cancels the cover, it is only right that the broker is informed immediately. Same-day, electronic communication should be offered as standard to give the adviser the best chance of saving the business. Legal & General led the way with this, others have followed but some are lagging.

A key need is for providers to inform intermediaries when customers change address. Some do but others are reluctant or do not have the capability. All providers would expect this courtesy from an intermediary, so why not the other way round?

Customers are facing tough financial choices and protection plans are often cancelled without proper consideration. Some are lured into replacing cover with cheaper but less comprehensive cover, sometimes without being made fully aware of what they are sacrificing. Swift cancellation notifications have helped us prevent many clients from making this mistake.

Providers must make retention a priority and ensure their processes are efficient. If they don’t, lapses, rebroking and churning will increase.

Emma Prescott is life office relationship director at Lifesearch


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Yes, blame the providers. I suppose a simple regular phone call by the adviser to the customer couldn’t possibly help, could it?!

  2. Colin Tomlinson 30th June 2010 at 8:46 am

    It is an unusual definition of churning, to offer a client an easier and potentially cheaper insurance option.

    And it’s not hard to get a DDM signed.

  3. I am dissapointed that the two posters above chose to post anon, they should be ashamed of themselves.
    There are two sides to the situation and I can see and have experienced the same problems as Emma has where plans have been suspended or insurers have made errors and it does seem harder to re-instate existing plans than simply re-write a new plan.
    Cheapest is not neccessarily best, particularly when CIC is involved and too often it turns out the reason something is cheapest is because medical disclosure has been light. In 12 years i have had one CIC plan I replaced for better cover declined for an Multuple Sclerosis claim becuase he was too embarasssed to tell me he was a recovering alcaholic at the time of the cover replacement, so I am very wary of replacing cover for ANY client without emphasising how important disclosure is and my concern is that many of these non advised protection sales are just that “sales”….

  4. Dermot Brannigan 30th June 2010 at 1:24 pm

    Good point, Phil. There are issues from a client’s perspective, in paying back premiums for cover they would never be able to claim on. But then, you cannot have systems that just allow a client to pay whenever, you’d never be able to cost that properly. Too many people are still too lax when considering the implications of ‘replacement cover’.
    For me its simply a case of taking the time to explain the benefits of the perceived ‘waste of time’ paperwork, rather than just a new product.
    But then so many other things in our lifestyles now can simply be replaced!

  5. To all posters,

    It’s simple – stay in touch with all your clients and review their needs regularly.

    We are all advisers and by doing this we demonstrate our worth.

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