Licensees should be placing a greater value on an insurer’s ability to pay claims and support clients when determining which offers to add to their approved product list (APL), one dealer head has argued.
Ray Miles, Executive Chairman of Fortnum Financial Group, said creating an insurance APL based on comparative pricing and terms and conditions did not effectively support advisers in their client service proposition. Instead, Mr Miles suggested licensees should be looking to partner with providers who deliver open and transparent service at all stages of the client journey.
Fortnum has put this philosophy into practice, updating its own risk insurance APL using 18 selection criteria, which include:
- Reputation
- Resolution processes
- Service standards
- Claims accountability
- Underwriting flexibility
In addition, unlike some other licensees, Fortnum does not charge insurers a ‘shelf-space fee’ to be included on the APL.
“In my view, creating an APL from comparative pricing and terms and conditions does little to inform advisers of an insurer’s ability to service the needs of their clients when it comes to making a claim or, indeed, throughout the life of their policy,” Mr Miles said.
… this new APL provides a tool to separate insurers on the basis of their accountability to our clients
He told riskinfo that while features and benefits were important, there was already a significant amount of research available in the market to allow advisers to compare offers.
“What we wanted to find out was what happens at claim time? What level of service will the client receive once they’re on an insurer’s books?
“Fortnum’s new set of criteria focuses on the client and the type of service they are likely to receive from an insurer,” Mr Miles said.
“In effect, this new APL provides a tool to separate insurers on the basis of their accountability to our clients. Armed with this APL, our advisers are well placed to offer their clients a range of products from insurers whose quality service reflects our own high standards.”
To develop its insurance APL, Fortnum appointed Col Fullagar, Principal of Integrity Resolutions, a firm which provides life insurance dispute resolution services to claimants, policy owners and insurers. Over a period of six months, Mr Fullagar used his expertise to build an APL assessment framework based on insurers’ services and facilities.
It gives the power back to the individual adviser
“This model is about keeping the insurers accountable to their own standards. The APL is open to any insurer, provided they can meet the criteria. If they meet the first 10, they become ‘Approved’; to be a ‘Preferred’ insurer they need to meet a further 8 criteria.”
Mr Fullagar also explained that unlike other APL models, Fortnum’s insurance partners were subject to daily reviews:
“At any time, if an adviser believes an insurer is not living up to the criteria, or they’re failing to deliver service in line with their service standards, they can report that to the dealer group who will take it up with the insurer.
“It gives the power back to the individual adviser, through their dealer group. If an adviser has an issue, they don’t have to take it up with the insurer on their own.”
Fortnum’s ‘Preferred’ insurers:
- AIA Australia
- Asteron Life
- BT
- ClearView
- TAL
Fortnum’s ‘Approved’ insurers:
- AMP
- Macquarie
- MLC
- OnePath
- Zurich
Ray Miles made sense until I read his list of Preferred and Approved providers.
This approach has been tried before, and if I remember, by the same parties with a different AFSL. i acknowledge It is a great ideal to aspire to, but delivery by insurers over a sustained period of time is very unlikely. Claims departments are always subject to pressure from management, particularly if bank owned
Every so often, ALL insurers revert to type. PMARs are thus ordered automatically, even though the matter has long resolved and the client states there is no residual impairment.
The “three strike rule “, where LOADINGS AND EXCLUSIONS cause a declination,comes back in vogue in underwriting practice, and “commercial ” underwriting vanishes
Around in claims, piles of files of longstanding claims with no obvious chance of ending are handed to some new whiz-kid in the section who sees a chance to get promotion by stressing those long standing claimants enough to get them to call their claim off.
Other Claims officers suddenly go on great “fishing expeditions “, without a specific goal, calling for financial information not requested at the start of the claim, at great expense to the claimant who usually can’t afford his accountant anymore,
I once had a claims officer apply the common Partial Disability formula over a 12 MONTH PERIOD, not the discreet MONTHLY period stated in the policy. That dill then sent a bill for $40,000 claiming overpayment to the claimant, just before Xmas. Sensitivity abounds !!!
I have no doubt promises will be made by insurers in return for production, but the target of consistently delivering the promise over a long period will, in my humble opinion, be unachievable given the poor quality of current insurer upper management,
After all, these are the people responsible for the “great group fiasco” with the ISN, not to mentions forays into cheap and nasty direct sales products which sully our industry.
Anyway, best of luck Ray & Col
Clearview is an interesting choice of you are selecting based on claims. Their philosophy can be great but track record surely should play the biggest part. Clearview has limited exposure to claims at this point given their infancy.
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