The claim is our core product in protection; not the policy. In a digitally enabled world, where all power is flowing rightly to the consumer, we should be making the sharp end of what we do – the end that matters most – utterly brilliant.
We have recently seen US disrupter business Lemonade lead very effectively on social media when it comes to claims, and Hiscox has been doing it successfully in general insurance over here for years.
In our world, however (excluding the wonderful Seven Families project, which very much needs to be funded and developed further) claims are rarely talked about positively.
We have laid the groundwork by publishing claim statistics but we need to further standardise the methodology of their calculation and, beyond that, turn the established insurer profit and loss logic on its head.
The power of paying out
It does not need an actuary to explain that the fewer claims you end up paying, the more money an insurer makes. But conversely, the more claims you pay, the more your market grows and the better everyone in it does. We have to build and sell policies that pay more claims and we need to make far more noise about them than we do at the moment.
Our behaviour needs to lead consumers to take for granted the fact that, in protection at least, their honest and fair insurance claims will be paid. We need to get to the point when a person in the street asked what proportion of life insurance claims are paid responds “all of them, surely?”
That change in consumer sentiment might sound pie-in-the-sky but digital capabilities mean we can deliver an entirely new paradigm if we are prepared to invest enough in it.
We must reform all aspects of the protection process, from algorithmic product design, underwriting and pricing that removes the snags that can catch people out, to simple application questions.
With focused and personal policy care, alongside a speedy, sympathetic and honest claims process, we can deliver brilliant outcomes, which will result in that change in sentiment and transform the amount of good we do.
If we could confidently tell clients that “the insurers we trust to protect you and your family pay out on every honest and fair claim” without being made to look like fools thanks to poor policy design or claims processes, then the protection market could lead the way in insurance.
The sector would be seen as a genuine force for good and retake its place at the centre of British financial services – a position we only lost with the demise of the “man from the Pru” in the 1970s.
To grow a 21st century business, you really do not want to make it all about the price or the actuarial science. You want to make it about giving consumers an experience that turns them into fans of what you do.
Tom Baigrie is chief executive of LifeSearch