"I'm an IFA who advises on protection. How can I use published claims statistics with clients? Is there an accepted sales technique for using such statistics? I'm also concerned about comeback of clients who might focus on percentage points and just want to go for the insurer with the highest pay-out rate"
In reality consumers do not choose their insurer by comparing pay-out rates. First, if they hadn’t come across our tool they would need to search for each pay-rate individually. Second, when comparing insurers the first statistic the consumer sees is the price/premium, which is naturally a dominant focus.
When advising a client there are many different factors that may lead to a recommendation, such as their insurance needs, occupation, health and budget. As an adviser, the pay-out rate isn’t used to compare insurers: it’s used as a reassuring factor when making a considered recommendation.
Nick Jones, Exeter Family Friendly
First, I think it’s important to highlight that the real driver behind protection insurers publishing claims statistics should be simple: to promote confidence in the industry as a whole and that we deliver on our promises.
This is an important story to tell, particularly in light on the PPI scandal, which has had a detrimental effect on our industry and the level of consumer trust in what we do. Certainly from an Exeter Family perspective, it was never about us versus the competition.
It’s only natural that some clients will want to compare one insurer’s pay-out rates with another, but it is only one part of the jigsaw, so they shouldn’t be taken in isolation. It’s a vital part of the adviser’s job to select the product that has the best chance of paying out: for example, by ensuring their client is covered under an own occupation definition.
In terms of claims statistics, I urge advisers not to simply stop at the overall percentage of claims paid but to delve deeper. Most insurers now include a breakdown of claims by the conditions that caused them, along with the reasons for declined claims.
Once the adviser has this information, they can build up a more detailed picture of the insurer and whether they are a good fit for their client.
