Life insurance companies are pushing to make their dealings more transparent, following disappointing satisfaction ratings from advisers.
In a rating of 448 different claims experiences, advisers have given Australian life insurers a satisfaction rating of only 74%.
Although the Australian life insurance industry does not have a satisfaction benchmark, the rating from Beddoes Institute research, included in an AFA White Paper, was 7% below America’s benchmark of 81%.
Phil Hay, BT Financial Group’s head of Life Insurance has been in the industry for more than 20 years and says the result could definitely be better.
“Anything under 100% for me isn’t enough,” he said.
“Somebody loved someone enough to take out an insurance policy to make sure they’d be looked after if something happened to them, or they’ve had the foresight to make sure they’re protected – the adviser has given that great advice to make sure they’ve got the protection. That’s what it’s all for.”
Hay says it comes down to transparency of the industry.
“When I looked at what the perception was, as someone who’d been in the industry nearly 20 years, it was soul destroying, because the perception is so far from the reality.
“The best way to get through a perception is to provide fact.”
Hay will be speaking to all his colleagues in the life insurance industry in an attempt to get a national benchmark. He believes they will all be behind him, and says he has had positive feedback from advisers at the AFA roadshow so far.
“The research has reinforced what the industry has known I think, and we’ve been trying for so long to address the perception but if we do benchmarking and make it transparent it’s a way of dealing with reality to perceptions.”
For instance, last year the life insurance industry paid out $4.8 billion in death and disability payments. Hay says these numbers are too large for the average Australian to wrap their head around, but if they were broken into how many claimants, what the average amount was, and how many were paid out per day or week, they would be more understandable.
Advisers rated insurers most highly in their fairness of claims assessment, with an average of 75.1%. Proactive communication – keeping advisers and clients up to date with the progress of claims – was an area in need of improvement, with an average score of 67.2%.
Insurers were also rated on ease of the claims process (70%), claims processing speed (70.5%), and empathy and sensitivity of claims case managers and staff (71.9%).
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