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Building Consumer Trust in Protection Insurance
In a recent blog post on the reality of protection claim pay-outs, we addressed the fact that one of the main barriers to protection insurance is the widespread – and false – belief that claims are frequently denied.
Publishing claims pay-out statistics shows consumers important details including exactly what percentage of claims are paid out. It also gives insight into declined claims and the possible reasons why a claim might be turned down.
We support the highest level of transparency and this all works towards building consumer trust and proving the real, tangible value of protection insurance.
Ignorance is Not Bliss
One of the main barriers to taking out insurance is the belief that ‘it will never happen to me’. Many people cannot comprehend the value of protection insurance because the idea of needing it seems so abstract.
Yet the number of claims made proves otherwise and shows that many of us will end up relying on that insurance and even using it as a lifeline.
We understand that full transparency goes a long way towards making good progress, but what does the future look like for claim statistics?
There is clear value in showing consumers proof that such a high proportion of claims are successful. There is also a benefit for the insurers who can use these statistics both to foster trust and to push their offering above the competition.
Now we need to continue along this positive tract to the point where all insurers are operating with an open book, including those who licence their services out to other brands.
Room for Improvement
Another key point for potential progress is the need for improvement around partially paid claims. This is “when the claims underwriter decides that a non-disclosure was relevant but was careless rather than intentional”.
As a result, they only pay out the amount the premium would have bought had the disclosure been made which can be far less than the total sum assured.
Publishing these payments as part of the statistics with a full breakdown will provide consumers with a more realistic and relevant picture of the claims market and do much to improve consumer outcomes.
By their very nature, partial claims muddy the waters of clear statistics as they are so unique. However, the system structure means that such claims do still pass through the way and administrative errors make up a big chunk of the small number of claims that are denied. This means that we need to ensure customers understand the risk involved when it comes to careless completion of application forms.
Claims stats need to improve in both quantity – the number of insurers publishing – and quality or clarity – the accuracy and detail with which the statistics themselves are conveyed and understood by the layperson.
The Human Aspect
As we discuss the importance of publishing claims statistics and operating consistent, clear communications, we must not forget the human aspect. Our team at Vintage Corporate firmly believe in a holistic approach to benefits and wellbeing, which is why we value close client communication.
It also means that we appreciate the need to focus on the story behind the product – and that we understand how engagement with numbers alone (without any human intervention) doesn’t bring protection insurance to life in the way that it should.
While statistics can doubtless prove very beneficial in communicating both the value and function of protection insurance, they need to go hand in hand with the right approach from the human side.
Behind the Scenes of Claims Statistics
Since claims stats have started to be published, the process itself has got fairer, non-disclosure has drastically reduced and the market as a whole has made great progress.
For consumers to make the most of these innovations, we always recommend taking tailored, holistic advice as opposed to cookie-cutter alternatives where no real thought is given to the person or business utilising the product.
This is especially vital when it comes to companies where the individual needs of employees, as well as the overall company circumstances, must be taken into account when choosing protection insurance solutions.
The human aspect also comes into play when we consider how to analyse claims statistics. Many current protection policies include value-added services such as rehabilitation.
When employees utilise these services for issues from back pain to depression and everything in between, this commonly avoids the need for claims to be made in the first place.
However, the statistics do not reflect this and therefore do not accurately represent the full value that policyholders can access.
Understanding Early Intervention
As protection insurance works to take care of both the ill party themselves as well as their family and employer, utilising value-added services such as early intervention and ongoing rehabilitation often means a far less stressful and costly experience for those indirectly affected by the illness.
For example, dealing with stress early by providing talking therapies will reduce the risk of an employee needing to take time off and the employer needing to take time, effort and cost to fill their position.
Many policies also offer access to valuable employee assistance programmes as part of their extra support services. This helps to minimise the escalation of issues such as depression, stress and anxiety as well as provide valuable support in case of bereavement, critical illness diagnosis and other common issues.
Early intervention and this type of emotional support can be a real gamechanger – when caught earlier, many illnesses can be dealt with far more quickly and effectively, resulting in less financial strain on the family and employer of the affected party, as well as ideally minimising or avoiding the need for workplace absence.
Most protection policies also offer a range of additional, effective avenues that employees can take to expedite their return to work for minimal workplace disruption.
Insurance can also be used to protect a policyholder’s family or employer in the case of long-term sickness, the latter by covering financial gaps should the employee take time out beyond the statutory sick pay allowance.
This provides employers with peace of mind and long term financial security. In the case of employee death, insurance provides much-needed financial stability for both the employer and the family left behind.
Protection insurance also puts the employer in a strong competitive position, acting as a good recruitment and retention tool by showing current and prospective employees how much they are valued.
It is clear to see that protection insurance provides so much more than invaluable financial support. With such a wide range of products available, it is essential to consult with an expert to work out the most effective type of protection for yourself, your family or your business.
Claims statistics are imperative, but we need to look at the full protection picture to understand the true value and function of our insurance cover.
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