The government requested the industry has a pensions dashboard, where consumers can view all their pension pots, up and running by 2019.
In May, the ABI, along with providers, stated the dashboard should be a centralised system that providers could put on their website under their own branding.
Finance and Technology Research Centre director Ian McKenna accused the trade body of choking off things that are in customers’ interests.
“They are a protectionist trade body that puts the interests of their members way ahead of the consumer, and as such, is no longer fit for purpose,” he commented.
“Take for example the proposals they have put forward for the pension dashboard. These are the equivalent of saying ‘let’s build a bicycle’ when you have a BMW sitting outside.
“Their proposals make perfect sense, if the internet didn't exist and smart phones hadn't been invented.”
Mr McKenna argued as a Fintech leader, the UK already has plenty of suppliers to deliver a pensions and protection dashboard, which would help consumers better understand the cover they have, both individually and provided by their employer.
He said: “For too long the protection industry has been the poor relation of the savings industry when it comes to delivering good customer data.
“A decade ago pension and savings providers put in place mechanisms to make the values of investments available online. The same work was done for protection, but life insurers failed to adopt it.
“We have seen overwhelming demand from protection advisers for delivering a better customer experience but insurers continuously cite legacy systems as an excuse for doing nothing,” he added.
Protection advisers have also taken aim at the ABI for not implementing industry standards for the publication of policy statements.
Roy McLoughlin, partner at protection specialists Master Adviser, said he was “astounded” the ABI did not encourage the majority of providers to at least send annual statements out to policyholders.
“There is a fear people might use them to go on comparison sites and try to find a better deal, but I think overwhelmingly people would top up, rather than shop around and leave.
“People simply forget what they’ve got and often that means cover becomes inadequate,” he stated, adding: “Surely this is a Treating Customers Fairly situation?”
An ABI spokesperson responded the issue of making sure consumers were aware of the protection policies they had in place and the benefits the schemes offered was not one that providers had raised with the trade body.
“Individual providers make commercial decisions about how to best communicate with their customers on their protection insurance policies,” they added.
For too long the protection industry has been the poor relation of the savings industry when it comes to delivering good customer data Ian McKenna Despite the ABI saying this was not an issue raised by their members, several providers Financial Adviser contacted backed the idea of annual protection statements or adding protection to the pensions dashboard.
Debbie Kennedy, head of protection for Royal London Intermediary, said sending an annual statement could help clients recognise the value of the benefits the protection product they have purchased.
She said: “A statement is something we are considering introducing to help them to service their clients.”
She added annual protection statements should become the norm across the industry, in the same way that annual pension statements are today.
LV’s head of intermediary marketing Justin Harper said his provider supports the introduction of annual statements and is currently undertaking a programme to refresh these documents for all its policies.
Zurich’s head of retail partnerships Peter Hamilton said his provider has issued annual protection statements for many years now.
He said: “There will be some who argue that such statements could cause customers to reconsider whether they want the plan, and that they might increase lapses, but that would suggest that the customers didn’t place much value on it in the first place.
“The statements can remind customers of important options on the plan and reinforce the need to review levels of cover in the light of changing circumstances.”
Paul Hudson, chief executive at Cirencester Friendly, noted his company is not a member of the ABI and the organisation has never encouraged them to join.
He said: “In any event, we would not wait to be given direction to do something that is good practice and helps customers to understand the cover they have and what they actually require.
“We do not want our customers to pay for something they do not need so we regularly encourage them to review their cover.”
Mr Hudson added Cirencester sends an annual statement that tells customers the maximum they could claim and encourages them to take advice.
Vitality Life’s deputy chief executive Deepak Jobanputra, argued that unlike other insurers, they engage with members throughout the term of their plan via a bi-annual print magazine and via email.
“Our life and protection products are made up of short and long term elements and as a result we send out detailed anniversary communications which detail any changes to the short term part of the plan as well as reminding people about their long term cover,” he added.
Steve Bryan, director, intermediary at Legal & General, said the inherent challenge with life and CI products is that they are not annual policies which renew automatically, but rather long-term contracts which may sit with the client unchanged for years.
“The annual prompt that you have with home or motor insurance just isn’t there. We have an indexation letter that goes out in year one to customers, explaining the potential for future policy increases and giving them the opportunity to decline.”
