Insurance claims – why financial planners and insurers must meet in the middle

Insurers and financial advisers must work together throughout the emotion-charged insurance claims process if they are to truly benefit the client and avoid the the frustrations and pitfalls of the past, as Luke Banfield explains.

In conversations with financial advisers around the country, it is clear that many have found navigating the insurance claims process on behalf of clients a difficult proposition, and lengthy delays in assessment or payment of claims have all too often had a detrimental impact on the adviser’s ability to provide quality customer service to his or her clients.

I would agree that the life insurance industry has, by and large, been slow to make substantial changes to the claims management process for many years. But I would also point out that this is changing.

Across the industry, consensus is forming that claims management is at its heart a customer service function – and that the claims experience is at its most efficient when insurers, advisers and clients all clearly understand the claims process and are able to work together to achieve resolution.

Challenging the status quo

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An efficient claims management experience is the validation of the promise made between the life insurer, the financial adviser and the client at the inception of the policy.

Across the industry, I see evidence that life insurers are really focusing on delivering on that promise.

While claims have historically been a low-priority area of investment for insurance companies, most are now recognising the benefits of prioritising the area.

Technology has played a significant role in our journey, and will continue to do so.

Investment in cutting edge systems will enable us to further streamline our claims process, leading to some significant improvements for clients.

For example, progress payment for income protection claims is now made within half a day of the claims forms being received – a real leap from only a few short years ago.

Meanwhile, auto-scheduling of payouts for long-term income protection claims also ensures that those claimants are not inconvenienced by having to resubmit paperwork to continue their payouts, as was the case in the past.

But driving improvements in customer service is not just about maximising speed and efficiency through technology.

Key to this is setting expectations up front at the beginning of the claims process to ensure understanding and certainty. Experience has shown this leads to a positive claims experience for both the client and the financial adviser.

It comes down to regular and predictable communication.

Clients don’t want to have to chase their insurer or their financial adviser for updates on their claim, and advisers certainly don’t want to feel they need to follow-up the claims team or even resort to pursuing an outcome through their business development manager.

Keeping everyone informed about the process is key – and this needs to start right at the outset of a claim.

The adoption of teleclaims by life insurers is not only facilitating a more personal relationship between the insurer, financial adviser and client, but is also allowing us to set clear expectations up front for the benefit of all parties.

Looking to the future

Across the life insurance industry, there is a consensus that both the number and complexity of life insurance claims are set to grow.

This will have profound consequences for our industry, but will also provide the opportunity for life insurance companies and financial advisers to differentiate themselves by their level of customer service.

We believe that insurers will need to continue to innovate in terms of the ‘value adds’ they provide their customers at claims time in order to remain competitive.

And as an industry, we will need to move from a reactive claims model to a proactive one; rather than simply responding to claims by providing payouts, we will need to build a future-focused, supportive model of claims management. 

This means that the focus of insurers and advisers needs to shift towards supporting the customer through the emotional and physical challenges of regaining and maintaining wellness.

And TAL would argue that the claims management process of the future will start even earlier than ever before, with provision of wellness programs that include education, prevention, and early intervention in high risk cases.

We also see opportunities for insurers and financial advisers to recognise that illness or injury also impacts on a claimant’s whole family.

Insurance companies and advisers who are able to provide financial and emotional support to the relatives of the client are sure to add value that makes them stand out from the crowd.

As the channels customers and advisers use to make and track claims look set to grow from paper-based and telephone to online and apps, the importance of great customer service will only continue to increase.

Consequently, the insurers and financial advisers who are able to facilitate outstanding, personalised customer relationships at claims time will be the ones to watch in coming years.

Luke Banfield is head of customer service and operations at TAL Retail Life.