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