Last month, the COVER Insight research revealed that poor service levels have forced many advisers to turn their backs on Norwich Union. In general, are industry service levels below expectations? What can be done by insurers to ensure that this does not continue? Do advisers have a role to play in this too?
Market views
Phil Hull, Sesame
It does not surprise me that some advisers are currently turning their backs on Norwich Union as its service issues are well documented within the industry.
Paradoxically, there are now signs that Norwich Union has addressed those long-standing problems and improvements are beginning to show through.
The bigger issue is that for too long advisers have focused solely on price for protection business, rather than looking at a whole range of factors, like claims handling and accuracy in their considerations. If advisers would become more discerning over service and "vote with their feet" then this alone would force providers to improve their standards.
Norwich Union is not the only company to deliver below-par service, but because many advisers use the company, the problem appears worse.
Historically, many providers have struggled with service and it is clear that more needs to be done.
It is important that providers properly understand what good service means to both advisers and the end consumer rather than focusing on what may be the easiest option for the company.
To this end, providers should look outside the financial services industry at companies that are genuinely respected for providing excellent service and learn from them.
Ian Noble, Lincoln Financial Group
With growing provider consolidation, the personal touch is increasingly being lost, but our feedback from intermediaries at Lincoln tells us to focus on that personal touch.
In our experience, a growing number of IFAs are looking at larger sums assured for their high net worth clients. Personal service is key here, rather than technology-based features like electronic application. IFAs want to be able to speak to underwriters and value the prompt personal attention and a quick turnaround.
Interestingly, a number of IFAs will send in applications to two or three life offices, and make their decision based on factors such as the speed and efficiency of new business processing. In some instances, with some providers, service can be below expectations and this is where those providers should be identifying how they are failing and taking steps to address these areas.
But advisers need to play their part too, especially when submitting documentation with their applications and taking a longer-term view of their clients' needs. Treating customers fairly is as much the responsibility of the adviser as the provider and protection should not be a one-off sale, but an evolving process as their clients' circumstances change.
Bob Perks, Falcon Group
Sadly, service from life offices all too often meets the expectations of intermediaries who have come to expect delays, poor communication and baffling underwriting processes. Efficient service is a pleasant surprise. So, what may be the cause and what can be done to move this problem forward?
Imagine a world where every insurer has a clear and well-communicated marketing strategy with operational systems and processes running in complete alignment. Every intermediary knows those providers who compete in the volume market for standard lives with competitive pricing, simple and fully-automated application processes delivering decisions within 24 hours.
Current experience is that there is no such clear distinction in providers' propositions or processes. Most clients are ostensibly offered the same product at the same price through the same process. It does not work for providers, intermediaries or clients and leads to frustration for all parties.
Norwich Union has just launched a new proposition for standard lives, currently direct to consumer only, which could be a big leap forward down this road. And Prudential's new life and critical illness product is an interesting development at the other end of the market. Let's hope we see more such moves in the coming months.
Adrian Clark, Legal & General
In an industry constantly striving for improvement, I question whether service levels do fall below expectations across the sector. Our current target is to issue terms or a decision three to five working days after receipt of all information. We are also innovating in a constant drive to improve those service levels. One example of that is the recent launch of Legal & General's interactive underwriting service – an addition to the existing online protection system.
Designed to enable advisers to improve the speed and responsiveness of service they offer to clients at point of sale, interactive underwriting is part of the company's drive to leverage the benefits of technology to assist the sales process. For a typical adviser, the service deliverable of using interactive underwriting will be automatic acceptance of cases for over 60% of customers.
But this is also a collaborative process, and advisers undoubtedly have a role to play in setting and meeting customer expectations. Customers are empowered by information and setting initial expectations can be the key to satisfaction.
The need for a full and detailed disclosure cannot be over-stressed. And if an initial interview reveals a clear need for medical evidence, they need to make sure the client knows that. Articulate it clearly. Identify the third parties involved in the process, and encourage them to be proactive in chasing down the evidence. Make the most of resources on offer from insurers, such as underwriting guides, and use them to keep your client informed about the process. Meeting and exceeding our customers' expectations is as much about communication as innovation.
