Protection industry looking in wrong direction for wins

As an industry, we are obsessed with growth. We spend a significant proportion of our time, money and energy looking at ways to ‘bridge the protection gap’, ‘engage new customers’ and ‘protect more people’.

 We invest in the development of products and solutions that better serve the needs of potential new customer segments. We design value-added benefits that help to embellish our core product offerings.

 We create resources, teams, programmes and initiatives to help advisers ‘sell’ more policies and increase customer take-up. We look at streamlining underwriting and making protection even more accessible.

 Don’t get me wrong, I acknowledge this focus on distribution is absolutely necessary for us to grow and sustain a viable protection market.

 But my question is this: while we continue to focus so much on sales, marketing and distribution (in other words, the acquisition of new clients), have we taken our eye of the ball?

 Have we forgotten about those valuable clients we have already acquired, that we have worked so hard to capture and who already believe in protection, trusting us to provide the desired outcomes when the need arises?

 Let me explain.

 It amazes me the number of providers who, still today, don’t proactively send annual statements to existing customers reminding them of the fantastic cover they have in place and the incredible value-added benefits they can enjoy from their policy.

 I hear excuses such as, ‘we don’t want to undermine the adviser/client relationship’. Nonsense! Just signpost back to the original adviser – we don’t mind. 

 At a time when we have artificial intelligence models that can produce automated customer journeys across countless industries, why does the protection industry still struggle to communicate effectively with its customer base?

 It’s almost like we assume, because the customer has taken out a policy, they will never need our help again. Worse still, I worry we convince ourselves it’s best to let sleeping dogs lie – ‘let’s not remind them that they’re paying for a plan, in case they cancel it’.

 Advisers and providers could do so much more to remind customers of the value of their policies by celebrating their positive decision to take cover and conducting annual or periodic reviews. This would inevitably help reduce lapses, cancellations and clawbacks.

 We seem to be so focused on attracting new customers and adding them to the cart that we can’t see the existing ones falling off the back.

 What concerns me most of all, though, is the current state of claims processing.

 I have recently had to help a number of former clients through the protection claims process. I also know of countless other advisers who have done the same. In fact, I am part of a chat group where some of the most prominent advisers in our industry share their day-to-day experiences with one another, swapping stories and tips on best practice.

 More often than not, the feedback I receive about the state of claims processing is negative. Whether it’s delays, lack of resourcing, ineffective processes, poor expectation management or downright terrible service, claims is an area of concern among advisers right now. An area that needs attention and investment.

 The point of claim is the moment our promises as an industry are put to the test. It is the focal point of everything we do. It all boils down to that. Will the recommended plan do what it was designed to do?

 At the end of the day, we could be the best advisers, the most competent sellers and produce the best products imaginable, but none of that matters if we let our clients down at claims stage.

 Yes, we’re paying out 98% of claims across the industry, but how many of those were paid in a timely manner? How was the overall experience for the customer?

 I take nothing away from the amazing men and women working hard inside claims departments, doing their utmost to provide exceptional service and support their customers.

 My question is whether they are receiving anything like the same level of investment and focus as other areas of the business, such as marketing and distribution. I sincerely doubt it.

 A short while ago, I submitted a claim on behalf of one of my former clients. I had recommended a four-week deferred period given his lack of savings and sick pay provision. The provider took seven months to process the claim, only to decline it anyway.

 What do you think this client’s perception of our industry is now?

 I urge providers to recognise that the point of claim is where reputations can be made or broken. Where all the hard work we do attracting new customers can be undone in an instant.

 Please, look at whatever you can do to support your claims departments, so that we, at the coalface, can feel even more confident about recommending plans.    

 Matt Chapman is founder of The Protection Coach