As we wrap up the final installation in our Pacific Life Re Round Table series, we asked our panel to reflect on ‘the next big thing’ for the industry – or the one initiative or change they think would lead to a breakthrough within the life insurance and life insurance advice sectors.
- Pacific Life Re Voices
- Andrew Gill – Managing Director, Pacific Life Re (Asia and Australia), Co-host
- Tyson Johnston – General Manager, Pacific Life Re (Australia)
- Adviser Voices
- Marc Bineham – Adviser, Noall & Co, National President Association of Financial Advisers
- Rob Vitnell – Adviser, Victorian State Manager, Australian Financial Risk Management
- Amie Baker – Adviser, Rekab Advice
- Kathryn Fitch – Adviser, Evalesco Financial Services
Part 4 – The Big Answers?
After a great conversation about the unvarnished realities associated with the challenges of operating successful life insurance companies and successful life insurance advice propositions, our panel was asked to reflect on the next big thing for the industry or the one initiative or change that would lead to a breakthrough within the life insurance and life insurance advice sectors.
Tyson led with a focus on building greater efficiencies at the point of sale and greater transparency of claim and other services. He said these were key areas in which reinsurers can make a positive impact, especially with more advanced technology expertise.
Tyson specifically referenced the United Kingdom’s ‘Protection Platform’, developed by Pacific Life Re’s technology company, UnderwriteMe, which can deliver that combined analysis of multiple insurers at quotation and new business stage. He said this isn’t something that is available in Australia as yet but asked the advisers on the panel whether this was something that would have value for them. ‘Yes. Absolutely.’ was the affirming response from the advisers on the panel.
Tyson also referenced the claims narrative, where he again emphasised that “…transparency is king in claims – particularly at the moment when the industry’s under so much scrutiny.” He said Pacific Life Re has developed and is pilot-testing something similar to its underwriting rules engine – but for claims – where the intention would be to deliver much greater transparency along every step of the claims process.
Rob said he worked within an entire business (AFRM Claims Advocacy) that was built for that purpose. He said AFRM has a distribution model for advice and new business but nothing comparable in terms of a distribution model for claims. He thinks there should be, though, in terms of advocacy for this service. He said some advisers do advocate for and articulate a separate claims service for their clients but thinks this is an area that can be better served: “Holding someone’s hand through the claims experience can be something very powerful,” said Rob.
He said his firm has managed over 600 claims for their clients, to the value of over $160 million, and he guaranteed to the panel that the experience of the 600-plus claimants is so much better than those who have dealt direct or who have been unadvised. He said the advice sector needs to work more collaboratively with insurers and reinsurers, singling out the need for greater efficiencies across the board. In short, Rob is advocating a collaborative approach; not a combative approach.
Rob also raised the important point of addressing the mental health of all claimants, reflecting this is an area that has had little historical focus. “Yes – deliver the claims money entitlement. But let’s also guide them through the process. Let’s help them. Let’s help their family. Let’s get around them. Let’s get them back to work, because people are healthier and happier when they get back to work.”
Summarising, Rob says a greater focus on a more encompassing claims involvement from advice businesses and insurers will lead to greater efficiencies for everyone up the line and better outcomes for everyone down the line.
Kathryn observed that Pacific Life Re and AFRM were following their own (different) paths in terms of developing better claims services independent of each other, making the point that there should be more collaboration and open-ness between stakeholders to better address the huge underinsurance dilemma facing the Australian public. She also reflected that as there were only a handful of reinsurers operating in the Australian market, they would be in a great position to help coordinate future efficiency initiatives within the claims sector, so that, in Tyson’s words, claims staff could be empowered to spend more time actually helping the claimants while their own tasks and processes became more automated.
There was general consensus the solutions around greater efficiencies and better, more empathetic services for claimants, lay in more open-ness and collaboration between stakeholders.
Marc referred back to his point about the value of additional financial advice associated with the claims process, even if that was $500 built into every claim benefit, including for legacy products. He said only 10 – 15 percent of claimants were actually paid by a cheque delivered by the adviser, and because of electronic transfers, the personal involvement of advisers at claims time was declining. Marc’s point was that a financial incentive would contribute to involving more advisers in their clients’ claims processes and aftermath.
Amie suggested that perhaps this Round Table forum can serve as a launching point for further discussions with other advisers and providers about working more collaboratively to deliver better outcomes for the ultimate client, irrespective of whether they eventually make a claim on their policies. She also advocated – as have others before her – for the industry to market itself better to the Australian public about how it adds value – that it’s not about product, but about the services and outcomes that life insurance provides.
Rob agreed, defining it in terms of social responsibility – that it’s the industry’s responsibility to deliver on its promises and to rebuild consumer trust. He said one way to do this was through telling stories, and to share that it’s not about profit, but more about the social responsibility incumbent on the industry to adopt and deliver.
Tyson reaffirmed Pacific Life Re is building a new claims engine that will have a standard set of rules applied to its processes – as it has for UnderwriteMe – which the insurers who utilise the UnderwriteMe technology could then tailor for their own systems as they wish. The organisations who currently use UnderwriteMe’s Underwriting Rules Engine include:
- MLC Life Insurance
- Integrity Life
- NEOS Life
A great opportunity in the first place for a reinsurer such as Pacific Life re to sit down with advisers and talk through the issues face-to-face in a way that can actually lead to creating better outcomes for everyone. A really valuable opportunity to hear direct from those at the coal face.
This discussion has been a great opportunity to dispel myths about what many consider to be a traditional ‘disconnect’ between advisers and reinsurers and making that connection stronger.
The big disruptor for Marc is finding an answer to whatever it will take to convince the public that life insurance companies pay claims in the vast majority of cases. He says much of that can be addressed in better marketing and that the big insurance companies, in concert with the two main adviser associations need to work better together to find a way to make this happen.
Marc referenced the APRA/ASIC Claims Statistics, recently made available, as a basis for a new marketing campaign to the community that life insurers pay 95 percent of claims. “We just need to be better at marketing.”
Kathryn said the industry needs to address the disconnect that exists between its stakeholders and between the industry and the public.
She also emphasised that so many policy holders have no idea what insurances they actually hold and that the financial advice messages need to start in schools in order to better educate the future generations of policy holders.
“This Round Table has given us [as advisers] a great opportunity to express what we’re facing.” Referring to regulatory reform and the Banking Royal Commission, Amie said “There’s been so much thrown at us, but the reality is there’s a lot that we deal with and we’ve only just scratched the surface [of how we can make things better].”
One key future issue for Amie was the potential spike in life policy lapses with the superannuation sector, following the implementation of the ‘Putting Members’ Interests First’ Act, meaning that Australia’s underinsurance problem will worsen.
Overall for Amie, the key areas the industry needs to address are: marketing to the public and implementing better systems and processes that deliver life insurance solutions.
Andrew felt the conversation was of great interest but also that the connection between reinsurer and adviser was also very important.
Coming back to his earlier comment, Andrew reaffirmed that by understanding his customers’ customers it helps Pacific Life Re do a better job and find ways to add greater value in turn.
Andrew encapsulated the conversation by summarising the panel was all agreed that more Australians need to have life insurance cover, but the advisers have raised key issues in expressing some of the problems or challenges they have in making sure that happens.
Andrew agreed that insurance delivered through advice channels is the best way to solve the underinsurance dilemma, rather than through insurance sold direct, thereby declaring his unequivocal support for a strong life insurance advice sector.
Referring to whatever the future big disruptor will be for Australia’s life insurance industry, Andrew was confident that ‘things will change’ over the next five years (especially in the area of better technology-led solutions), which will address and solve many of the challenges discussed at this first-ever reinsurer/adviser Riskinfo Round Table.