Commitments needed from life insurers
Just weeks out from the release of the final recommendations of the Trowbridge Report, strong support has emerged for the implementation of a regime under which life insurance companies are required to commit to delivering on their product commitments.
The concept of insurers committing to living up to their product promises has been raised by Money Management columnist and life insurance claims specialist, Col Fullagar who has suggested that while much attention has been directed at the role of advisers, just as much attention needs to be directed towards the conduct of the other major parties in the equation — the insurers.
Fullagar said that if insurers were serious about wanting to overcome negative perceptions of the industry, it might pay dividends for them to focus attention on their own practices as well as those of advisers "because it is clearly the case that even if brilliant advice is implemented without any actual or perceived commission bias and the insurance remains in place, the public's perception of the financial services industry can still be decimated if the insurer acts in a way that is untoward and/or unprofessional".
He said that one way insurance companies could change negative perceptions would be to replace "insurer claims" with "insurer commitments".
Fullagar noted insurer claims such as "all matters are handled expertly, sensitively and as quickly as possible"; and "You can be sure that we will do everything ¬. to make it as easy as possible for you."
However he said the problem with such "commitments" was that suffered terminally from being mothering statements that were easy to say, difficult to deliver, and too often, not the reality.
"They are not believed, not trusted and may as well not be said," he said.
Fullagar said that if insurers were to make commitments rather than claims, then such commitments would need to be more specific and identify precisely what those being insured could expect to be delivered.
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