Trust the best kind of insurance

They are entrusted with providing protection for the financial plan of the adviser’s clients.

They are entrusted with protecting or even enhancing the reputation of the adviser.

They are entrusted with the client experience at the time of a claim.

They are insurance companies … but at times the question has to be asked, can they be ‘trusted’?

Two recent, but in no way isolated experiences for our advisers highlight the problems that have traditionally been portrayed as facing advisers and clients alike.

Experience one

An adviser called us to ask for assistance in handling his first terminal illness claim.

Pointers were given and then he was referred to the claims manager for the particular insurer who, it was indicated, would be able to provide specific assistance and also refer the adviser to the appropriate claims assessor.

One final bit of advice was given: “Make sure when the claim form is sent it is not called a terminal illness claim form.” The adviser evidently thought we were joking.

Several days later a despondent adviser called back and told how, not only was the form a terminal illness claim form, but it had been sent directly to the client.

The upset client in turn had called the adviser and indicated that whilst he knew he was ill, he was not willing to “give up yet” and as such found the manner of presentation of the form disturbing and offensive.

The terminal illness benefit is payable if, in the opinion of the medical practitioner, the insured will not live for longer than 12 months. Medical practitioners have been known to be wrong. People often hold onto this hope.

Where is the compassion and understanding?

Experience two

In brief, an upset adviser contacted us to say that a letter had been sent to a deceased client. Why? In order to return a copy of his death certificate to him.

The client’s widow was understandably deeply upset by the error.

Yes, mistakes happen, but it seems that when mistakes happen, more often than not it is left to the adviser to correct the situation and apologise for the error. (In fairness, it should be noted that in the case of the latter experience the insurer did send an apology to the client’s widow.)

Advisers and their support staff and clients spend countless hours uncovering and correcting the errors of insurers. At best, an apology is received and, in very rare situations, some form of financial compensation, but invariably the adviser is left out of pocket and the client is left with a deep concern about how they would be treated should they ever need to claim.

With insurance companies, much of the issue revolves around the use of their limited resources: people, money and systems.

But are insurers using these valuable resources wisely?

For example, advisers are constantly receiving invitations to product launches for the various insurers, and at these functions people get up and do their best to make what is generally a mundane exercise in ‘catch up’ look exciting and innovative.

Do advisers really get all twitchy because a particular insurer now has 100 per cent trauma insurance buy-back?

Do advisers have difficulty containing their excitement about revised premium calculation software?

Advisers also know only too well that the motivation for these product ‘upgrades’ is not so much to provide the adviser with a better quality product to recommend, but to ensure the particular insurer’s product scores sufficiently well on the various risk research vehicles so advisers will be willing to represent the product to their clients.

If advisers ever doubted this was a primary motivation, all they would need to do is speak to the researchers and find out how many insurers, subsequent to obtaining ‘adviser feedback’, then check with researchers to see how well this ‘feedback’ would score if implemented.

Yes, advisers and clients want product improvements, but more than product tweaking they would like to see policy wording changed so the true intent of the contract is clearly and comprehensively set out, so the chances of misunderstanding and disputes at the time of claim are minimised.

But just as importantly, advisers and clients are looking for an insurer that will find and retain really good staff, who have the ability and are given the opportunity to minimise the chance that problems will arise.

They are looking for an insurer that will get their systems right, so within their own company staff are not being diverted into performing endless manual bandaid corrections.

They are looking for an insurer that will get systems right so business development managers (BDMs) can perform true value-add functions, rather than being used by advisers simply to correct problems within the BDM’s own company.

They are looking for an insurer that will get their systems right so the adviser and their clients will be able to place business with the insurer and in turn be confident that the business will be consistently administered with efficiency and empathy.

There is only one way that advisers and clients can ever hope for this to occur.

The point has to be made to the various insurance companies, and advisers should en masse consider the impact support and embargo would have on the companies that do or do not deserve to be ‘trusted’.

Insurance companies indicate that they listen and respond to adviser and client needs.

Give them the opportunity.

Col Fullagar is a risk manager at GenesysWealth Advisers .