Life insurers should be guided by a strong philosophy more than strong processes, according to the head of a life insurer, who claimed good philosophy would result in better client outcomes during difficult claims.
MetLife Insurance Chief Executive, Deanne Stewart made the statement at the recent FSC Life Insurance Conference, adding that a well-developed philosophy of life insurance could guide the internal and external behaviours of life insurers when dealing with consumers and other industry stakeholders.
“Philosophy should guide your policy, should guide your processes. As it relates to culture, it is like the guard rails of the behaviour that you are wanting to see in an organisation,” Stewart said.
“Some companies created it quickly but I think many in the industry have realised the importance of philosophy and taking the time to get that right to truly be the signpost for that organisation in the public’s eye,” Stewart added.
This approach had led MetLife to walk away from a tender for a super fund last year, Stewart said, after the fund stated its approach was to minimise as many claims as it could pay.
“Philosophy should guide your policy…it is like the guard rails of the behaviour that you are wanting to see in an organisation”
Stewart also said processes should not dictate how an insurer behaved and that a good philosophy would provide better outcomes for policy holders.
“Getting the culture right and the guard rails and behaviours and values, rather than just working from a piece of paper, is so critical for us as an industry constantly getting each of these decisions right, because you cannot write the rules for all of them,” Stewart said.
Stewart also called on leaders within life insurers to adopt their company’s philosophy pointing out that they were under constant watch by staff and that behaviour at the top of an insurer set the tone for the whole of the business.
“We are the role models for setting of the values. The values might sit on a wall but actually it’s everyone in the organisation watching how we act that truly sets the values and the culture,” Stewart said.
“As leaders, thinking deeply about how we role model the values in our everyday action is important but also really critical is when we are making the hard decisions. When facing into tough decisions everyone is watching and seeing what is effective and what they should be doing.”
That Super fund seems to have fully developed it’s Philosophy when it stated it wanted to minimise as many claims as it could pay.
Philosophy is an admirable thing to throw around, though at the pointy end, when a claim is reduced or denied, it will always fall back on policy wording and processes within that organisation.
They’re nice feel good words from a CEO of a Life Office.The problem is that it doesn’t take much for a company to change it’s philosophy, a simple change of management can do it. As Jeremy said, the only thing that really matters at claim time are processes and policy wordings.
I was told (by a Life Office Exec) of an ISF that set the same parameters for group life to keep the cost of insurance down. It then explained their dog of a policy for income protection for their members. How is that the readers of this article must comply with ‘Best Interest’, but the Rich and Powerful can legally ignore this concept?
The Philosophy of all big (publicly listed) companies it this. Make as much quick profit and drive up the share price. Its a joke to think that they care about their clients (why pay bonuses to claims staff for reducing or declining claims).
If it wasnt for Risk Advisers (the proper ones who set policies up correctly, not including the Sales reps for insurers or I-selects) who actually care about the client and know the ins and outs of all the different insurance policies and their features and are legally compelled to act in the clients best interest then there would be a race to the bottom for all these insurers.
Oh, thats what they doing. They have succeeded in eliminating the majority of risk advisers by imposing a 2 year claw back which will force consumers to go direct. This means that it will purely be a price decision even if they shop around to 3 different insurance companies (which client is going to read all the PDS’s and decide which has the best terms).
It will revert back to the days when insurance sales men/women can sell clients life insurance policies which are super cheap but have clauses in them which read something like this “the life benefit is only payable if the life insured dies whilst eating a Mars Bar and riding an albino Mongolian Yack at 10 exactly 10 seconds past midnight on the third wednesday of every month”.
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