Electronic notification can help advisers keep on top of their clients’ lapsed policies and make sure they are fully covered at all times.
According to Legal & General, its own early warning system, which it launched in 2010, has helped UK advisers and their clients to claim more than £125m over the past five years, by saving potentially lapsed protection policies.
Dispensing with the need to take out new policies on potentially higher premiums, or the risk of being without cover, L&G claims the EWS has enabled advisers to stay on top of their clients’ protection needs.
Moreover, L&G’s head of commercial management and distribution quality Andy Clark said that so far this year £23.4m had been paid out through protection policies that were reinstated as a result of the firm’s system.
Mr Clark said: “These figures are testament to our efforts in supporting advisers not only to generate new business, but also to retain existing clients.
“Helping advisers to develop and monitor the quality of business processes feeds into the level of customer service brokers can offer, which in turn improves client retention.”
He added that ensuring that policyholders are kept up-to-date, particularly with developments concerning the validity of their cover, was a large part of an adviser’s job.
Emma Thomson, life office relationship director for London-based LifeSearch, said: “We certainly do catch people through this early warning system. There’s an electronic feed that goes into our system, our advisers pick this up and then contact the client.
“It is very important for providers to let intermediaries know when a direct debit has been cancelled or a policy has lapsed. We can then let people know – often they do not realise their policy has lapsed – and we can renew their policies.
“If the L&G figures are right then this is a fabulous thing for the industry.”