Advisers rate major insurers

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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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  • James Smith on 23/07/2013 2:01:02 PM

    These survey results highlight the elephant in the room in regards the FOFA legislation. There is an absence of acknowledgement of the role advisers and their businesses play in bridging the service gap offered by the big insurance and investment companies. They hide behind bureaucracy and their PDS and leave the personal service and follow up to the advisers who often have to deal with inadequately trained customer service teams with poor service cultures. The cost in bridging this gap is enormous. it is long overdue for the big insurance and investment companies to acknowledge this gap. This in turn will reinforce the role of adviser businesses in the end to end process and highlight the danger of legislation that results in advisers being inadequately remunerated for their role.

  • alleycat on 23/07/2013 1:21:46 PM

    Mr Hay may also seek to find out why Life Company Trauma definitions in Australia are not standardised like in the UK.
    No adviser can pre-empt what Trauma condition a client may suffer in the future, nor can he foresee that one company may pay for a particular event where another company may not by definition.

    You want transparency but Life companies don't want to be too transparent for fear of losing potential future business.

    For instance, Zurich recently brought out a product up-grade of their income protection insurance.
    What was altered in that up-grade was the treatment of a partial claim.
    It was not to the advantage of future clients but here's the point, there would be very few advisers who would have bothered to read the new PDS or understand the ramifications to their new clients.
    Zurich's defence would be that they put it in writing in the PDS, it's up to the adviser/client to read what it means to them in the event of a claim.
    The question remains that what they have done is legally correct but is it morally correct to not point out the change in contract conditions?

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