Being there

A month ago I presented to a conference of mostly risk advisers with a strong message that was interestingly welcomed by most and commented on as a forgotten ‘angle’.

I know there are many reasons for the downturn in insurance penetration. This is about just one of them — but an important one.

We have forgotten what we are selling. We are selling a claim, every time a client buys insurance.

If the client truly believed they would never claim then they would not buy — it’s that simple.

But we have stopped positioning the purchase as a purchase of a claim, somewhere down the track and have gotten completely carried away with the products and the policy document.

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We worship wordings — we should be worshipping the claims that are facilitated by those wordings.

It also seems to have become a common thing for advisers not to voluntarily involve themselves in their clients’ claims.

To compound this — or perhaps it is a cause of this — advisers don’t seem to be actively encouraged by insurers to play an assisting role to the claimant.

My message therefore is twofold — let’s get back to selling the claim rather than selling a bunch of paper; and let’s really help the client understand that we are the pivotal point in their financial support system. If there is a benefit to be claimed, then we as the adviser are there to facilitate that.

What is the client buying?

When you as the adviser successfully present concepts translated to individual client circumstances, you provide three things to a client:

~ certainty — after acceptance no one can take away that cover;

~ currency — there is a guarantee of retaining real value in the benefits via the indexation features; and

~ claim — this is why they have bought.

The fourth thing clients buy is you — the value of having you there to help them through the time they dread the most.

Claiming on the policy is what every client doesn’t want to do, but when they do they need your support.

Is there a fear that the insurer won’t pay and you will bear the brunt of that frustration? The numbers of claims that are denied are miniscule.

It’s worth recognising that if you are involved in a denied claim (statistically unlikely) it’s better to be there to limit the damage to your business, than to be conspicuous by your absence.

This gives a disgruntled client the opportunity to make mincemeat of the outcome rather than consider the outcome is not your ‘fault’ and you did everything you could to smooth the way. All the time reinforcing that it is your role to help the client to manage the claim no matter what the outcome.

The group to whom I presented this message had 11 complaints attributable to their life risk activities in their last reporting year.

Spread that across many dozens of advisers and it’s easy to see that any one adviser stands very little chance of being embroiled in an unpleasant experience and even if they do, doesn’t that come with the territory?

General insurance brokers would say that is an issue they face regularly — claim denials or adjustments are common in the general insurance arena.

The upside of being involved in the more likely satisfactory outcomes is huge.

Are you selling the claim?

The challenge is to ask yourself as a long-term service provider to your clients: do I sell the claim or do I sell the policy document (and the more good stuff about the definitions and policy wordings in the Statement of Advice the better)?

Will my clients contact me first when they become ill or injured? This is a great measure of whether you have sold a policy or a claim. Have I created an expectation of a claim in this client’s mind — this is actually a positive outcome of your relationship building, not a negative one.

If I am not selling a claim with me as the natural facilitator, then what am I selling? How am I positioning my services and role?

There are many stories of clients who have told their adviser months later of a problem and have been asked incredulously, ‘Why didn’t you call?’ There is an easy answer to this — no one created the expectation to call.

A few helpful tips at this point will go a long way:

~ Market yourself as a facilitator — you are here for the long haul not just for this sale. That necessitates talking about claiming from the very beginning.

~ Ensure you have loads of claims statistics to quote — be ready to tell your clients that this or that insurer (have several stats ready) have paid out $x million last year in life risk claims.

~ Be prepared to be proud of what you have done already — covered the client for their risks and underpinned their wealth accumulation strategy (or whatever life stage they are managing).

Lock in your role

You can easily reinforce that important role you have played by sending the client a ‘congratulations you are now covered with peace of mind’ letter.

You can lock that reinforcement in even better if you then send a ‘I’ll be here if any of these changes happen in your life’ letter to pre-empt any review that might be needed during each policy year.

You will subsequently really cement the commitment to the protection concept if you balance the traditional, boring, administration-focused life insurer renewal letter with a letter of your own:

‘Dear Client,

I must congratulate you on not having had to claim on your life insurance and your income protection this year. I am delighted and I’m sure you are too!

Just to be sure to maintain that peace of mind, though, I’m encouraging you to keep up those payments this year too ...’ and so on.

How well does this position you as a risk manager for the client?

Avoiding the lost policy debacle

A key role you can play well before any claim arises is simply to ensure there will be no delay caused by the inability to locate the policy document when a claim does occur (the original is required to be produced by law).

This of course is best managed at policy issue time. If you offer to make a note of the location of the client’s policy papers at the outset and then update this information on the client’s file every few years, you will save time and expense for the client.

If the policyholder cannot locate the original document, the insurer must advertise their intention to settle a claim; the advertising fee will be charged to the client; and a minimum of 10 days’ delay will ensue while the required time elapses before payment can be approved.

When the client does need to claim — as many do — how can you contribute to that process in a constructive way? Apart from ensuring that the right forms are sent and the insurer is cognisant of your wish to be involved where possible, the value can be enormous.

No involvement, doubtful outcome

This can best be described by outlining a few of the dangers of advisers not being sufficiently involved at the beginning of a claim.

An example came to light recently. A claimant’s Day One accident benefit was forfeited when an adviser chose not to assist a client but to refer them directly to the claims ‘hotline’.

The hotline did its job and sent out a claim form, but because no knowledge was applied by the adviser to managing the claim correctly, it was not lodged appropriately and the Day One benefit was not able to be applied when the claim was eventually lodged.

This adviser is currently being sued through the civil courts, but most significantly the client was out of pocket by an amount he’s happy to sue for.

There are areas of claims management where it just isn’t possible to fully engage the adviser — this is accepted and understandable. But there are too many times when the client is left to fend for themselves.

Reconsider the way you position your role for the client and review your regular communication with them.

Have you sold the full package: a claim waiting to happen and your guidance for the client when it does?

It’s a strong client value proposition any way you look at it.

Sue Laing is principal of LaingAdvisory Services . She can be contacted at sue@laingadvisory.com.au.