One of the gripes you often hear from advisers is that the decision-makers in our industry are so far removed from the front line they do not understand what our clients really worry about and what motivates their behaviours, let alone our barriers to writing protection business.
Indeed, I have done my fair share of moaning in this regard. If the top brass at insurers and reinsurers have never done our job or do not spend time in our world, how well placed are they to fully understand the changes or improvements that need to be made to processes and product developments?
The drive for greater interaction between both ends of the distribution spectrum should not be a one-way street, though. The adviser community can and should do its bit too.
An encouraging initiative is the Protection Distributors Group, comprising 10 diverse protection advice firms. Its objective is to establish a cohesive voice to represent protection distribution, agreeing on common objectives and lobbying for better customer outcomes. I like this idea because a sole voice carries little weight and could be accused of only supporting its own agenda.
The members of the Protection Distributors Group vary in size, style and methodology, and are a genuine representation of the diversity of protection distribution. Decision-makers in the protection industry would be well advised to listen to their ideas.
Last year, the Protection Distributors Group called for a “funeral payment pledge” from insurers to help bereaved families cover funeral costs should the life assurance payout be delayed by probate. LifeSearch life office relationship director Emma Thomson, who is chairing the group, believes insurers could do even more than this. “Given that 99 per cent of life claims are paid, going even further by offering to pay the funeral costs as soon as the insurer is notified about the claim would provide extra help, and pose minimal risk to insurers,” she says.
I agree. This would be a relatively small commitment for the insurers but a massive gesture in terms of enhancing the reputation of the industry and demonstrating it genuinely cares and is here to help at times of need. No one likes to hear it but it is true that the protection industry (and insurers in particular) are not held in high regard by consumers.
Of course, it could be argued that writing the policy in trust would negate this gesture. This is true but the reality is far too few policies are written in trust, for a myriad of reasons and for debate on another day. Similarly, not enough people have written a will. These are different battles and issues that cannot be fixed after the event.
In the meantime, it will be interesting to see how many insurers get on board with a funeral payment pledge.
Aviva and Zurich already make such payments, and the Protection Distributors Group tells me AIG has agreed to sign up. Apparently, three other insurers are close to committing too. Hopefully we will see other names soon.
Peter Chadborn is director and adviser at Plan Money