Claims advocacy is a key service proposition for financial advisers, and those who do not offer this service are missing out on a crucial opportunity to demonstrate value, says one dealer group head.
Craig Parker, General Manager of risk-specialist licensee Affinia, has called on advisers to step up and advocate for their clients at claim time.
Mr Parker said the proportion of disability and income protection insurance claims had been steadily increasing over the past decade, and with it the demand for support services for clients lodging these claims.
“Advisers are spending more of their time now than ever managing claims on behalf of their clients for ‘living’ insurance. The recent reporting by all major life insurance companies of large increases in claims on disability and income protection rather than traditional end of life insurance demonstrates the opportunity advisers can bring to consumers,” he said.
He also pointed to figures from Affinia’s partner, TAL, which show that this trend is likely to continue, with the take-up of ‘living’ insurance cover at an all-time high.
“Disability cover and income protection over the past decade have become more popular as consumers consider the impact of not being able to work again. Trauma/critical illness cover in more recent years is also being taken up.
“The result is that the ratio of living to death benefits now sits at an historic high at 2.5:1.”
The increased involvement of lawyers in claims is worrying
But he warned that advisers who did not provide claims support services could be doing themselves, and their clients, a disservice.
“The increased involvement of lawyers in claims is worrying because this is a role advisers should be performing on behalf of their clients. The involvement of a lawyer will not influence the decision of an insurer. Claims advocacy is the role of the adviser.
“The legal profession may not have the same intimate knowledge of a client’s (and their family’s) personal and financial situation as the adviser does. Nor do they hold the same strong relationship with insurance companies or the understanding of the intricacies of each specific product a client may have.
“Claims advocacy is a key service proposition of the financial advice profession and if this is not carried out during this current period of heightened claims, advisers are missing out on a crucial opportunity to demonstrate their value,” Mr Parker said.
Katherine Ashby, Senior Product Technical Manager for BT Life Insurance, concurred with Mr Parker’s position, saying when a claim goes through the client becomes an advocate for life.
“We really encourage advisers to be involved in claims, and to be the advocate for the client,” Ms Ashby told riskinfo earlier this year.
“Insurance is complex, and so there is a role for the adviser to play in helping the client understand the policy terms – both at point of sale and point of claim.”
…all people worry about claiming on insurance
She said advisers should be doing more to promote their claims services at the beginning of their advice conversations, to help allay fears that the insurer may not pay when it is time to claim.
“The reality is all people worry about claiming on insurance. They do come into it with an element of nervousness. That’s not just whether the insurer is going do the right thing, but also whether they’re actually covered for their illness or injury. Consumers see stories in the media like the Queensland floods and are warned to read the fine print, so of course they worry that they’ve missed something. They question themselves as well as the insurer.”
Riskinfo examines the involvement of advisers and lawyers in life insurance claims in this quarter’s riskinfo Magazine cover story.
Being very “old school” its very difficult to imagine when advisers started to treat claims service or advocacy as an optional client service. Do we now consider it reasonable that clients are sold an intangible product & virtually abandoned? Is that the outcome we would wish for our own loved ones? The growing propensity for the involvement of the legal profession at claim time could have some very ordinary consequences (& quite rightly) for Advisers, Dealer Groups & their PI Insurers as said legal experts also cast a very critical eye not only on original recommendations & ongoing “service”(or lack thereof) but most importantly on what may not have been “recommended”. Beware the “sins of omission”
Claims assistance, or advocacy, is what we’re all about if we’re true to our code of ethics. The claims experience can be a nightmare for our clients if unassisted. This is where many clients become negative about what we do and they voice it to their friends. This is the area from which most bad publicity stems.
It can and would be a major selling tool if we used claims statistics and our own experience in assisting with them. Clients and prospective ones can relate to that and it’s one of the key things they want be assured about.
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