Katya Maclean: Critical thinking

'We've been bold and brave in our proposition design'

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Katya Maclean: "Advisers have an incredibly challenging job. Our role is to make it easier for them to choose the right critical illness cover for their clients and give them confidence we’ll be there when they need us."
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Katya Maclean: "Advisers have an incredibly challenging job. Our role is to make it easier for them to choose the right critical illness cover for their clients and give them confidence we’ll be there when they need us."

Guardian CEO on condition wordings, doing the right thing for customers and winning Best Individual Critical Illness

We were thrilled to win the Best Individual Critical Illness award at the COVER Excellence Awards 2020 - thank you to the judging panel, and everyone who has supported us. It's been an exciting two years since our launch.

We've been bold and brave in our proposition design, challenging some ingrained industry norms, so it's heartening to receive this recognition. The feedback from advisers is that our critical illness product offers the very best outcomes for their clients - and that's exactly what we wanted!

Paving the way for a new approach

One of the most commonly recognised difficulties for advisers selling critical illness is that, unless you're a medical expert, policies are notoriously hard to compare. In an attempt to overcome this, comparisons between policies have taken different forms over the years. Most crudely, there's been a straight price comparison.

Another crude method has been comparing the number of conditions covered. Both approaches are flawed in their own ways. For a while, the industry was accused of product tinkering. But when you think about it, until we'd all accepted that price and number of conditions were no longer the right way to talk about products, it was difficult for providers to do more than tinker. Redesign was risky because it just didn't fit the industry ‘model'.

But now, we're delighted to say, things are changing

Our critical illness definitions are one of the things we're most proud of here at Guardian. Coming to market as a totally new business, we were able to design them from scratch. We wanted them to be truly comprehensive. We wanted to be able to pay claims more easily and sooner. At the same time, we wanted to improve trust in our industry, making it easier for us to meet client expectations and fulfil our promises.

So, our definitions for the most commonly claimed-for conditions - including heart attack, stroke and cancer - all pay out on definite diagnosis by a qualified UK medical consultant. They've had years of training and have the right qualifications. Clients trust them. They're best placed to say if a claimant has a condition or has suffered an event like a stroke.

We're essentially reducing the risk of a decline for not meeting a medical technicality. You just need to read our definitions to see their simplicity - you don't need to be a doctor to understand them.

And the biggest achievement for us is that others have started to follow, creating their own ways to simplify wording, or move to body systems - all ways to make it easier to understand what's covered. We're starting to see a shift, for the better, away from a numbers game to simplicity and clarity of definitions.

Rewarding loyalty is only fair!

But what good are crystal clear definitions if they go out of date? That's one of the biggest challenges in our industry. Improvements to critical illness definitions generally only apply to new customers. This leaves advisers in a tricky situation - rewrite the policy and the client will likely have to pay more, or leave it as is and hope they never need to claim on those particular definitions. For customers, it's just not fair. So, we've taken a different approach.

We think existing customers should be treated as well as new ones. If our critical illness definitions improve, we check any claim against both the definitions the customer bought, and the definitions we offer to new customers. For most conditions, we pay out if the claim is valid under either. Usually this is completely free of charge. Occasionally, we may introduce changes that will come at a cost. If we do, we'll offer existing clients the opportunity to pay to add these when we upgrade the condition. If they choose to upgrade, their policy will be upgraded to include that definition for future claims. So they're never left behind.

Our cover upgrade promise is unique, and we're proud of it. We think every critical illness product in the market should take this approach. Policyholders should be rewarded for loyalty, not penalised.

Dual life - protection for the long-term

But while definitions are a key factor when choosing a critical illness policy, they're not the only factor. One of the biggest challenges we brought to the market was our dual life approach. Which is effectively two single life policies in one application. That's not unique. But what is unique is that we don't offer joint life policies at all. With a joint life policy, if one partner dies, the other is left uninsured. What's more, they're now older and may be in poorer health, so buying a new policy could be costly - if they can get one at all. With Guardian, our approach is dual life for every couple. They apply together, and advisers quote on the portal exactly as they would for a joint life policy, but we return a quote for dual life. Double the potential payout, with a multi-life discount applied to keep the premium competitive. In a recent survey, we asked 553 advisers to rate our proposition features - our dual life approach came first [1].

The right thing to do

We've designed our critical illness policies this way because we believe it's the right thing to do. Advisers have an incredibly challenging job. Our role is to make it easier for them to choose the right critical illness cover for their clients and give them confidence we'll be there when they need us. guardian1821.co.uk/advisers

This article - brought to you as a partner-led insight from Guardian FS - originally appeared in our COVER Excellence Awards Winners Special eBook

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Source: 
[1] Guardian survey to 553 advisers from 19 October until 30 November 2020

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