Reflecting on fairness

The industry hit another low last month after it received yet more negative media coverage when the BBC programme, Watchdog, exposed two declined critical illness (CI) claims. One of the claims in particular caused heated debate among industry experts. The case involved policyholder Jan Lillywhite, whose claim was declined after it was found the disease she was claiming for was not recognised as a critical illness when she took out the policy - despite it now being covered by the provider.

This case seems to have struck a chord with IFAs, who argued that insurers should apply any positive changes retrospectively rather than just let new customers benefit from the latest CI definitions.

However, providers did not seem to be overly keen on the idea, with one insurer saying going back to existing customers and making changes in certain places is "not practical" and would only "generate more confusion among policyholders who may already be confused about what they've got".

Words of wisdom? Let us be honest here for a second. The reason why not a single provider has, so far, attempted to make any positive retrospective changes to the current round of alterations is not because it would be "confusing" or "impractical" for customers, but, as with most things in the business world, it all comes down to one thing - money.

It is understandable that firms may be balking at the idea, considering the financial implications it may have. That is fair enough. However, with most providers in the market insisting that they want to treat customers fairly, this excuse is simply not good enough.

Is this in line with the regulator's Treating Customers Fairly initiative? I would have thought not. Because, as Teresa Fritz, principal researcher at Which?, says: "Not only do you have to treat your new customers fairly, but you have treat your existing customers fairly as well." Maybe it is time providers start thinking about that.

Johanna Gornitzki, editor