The Association of British Insurers (ABI) has published a guide to help firms in the long-term savings market with vulnerable customers.
The guidance, which has been developed by an ABI working party of life and pension providers, draws on examples of good practice to raise awareness across the market of how to best identify and support vulnerable customers.
According to the trade body, the introduction of pension freedoms in 2015 created new challenges for those customers who may be more vulnerable, such as older people, and those with lower literacy skills.
ABI is making three recommendations for how to handle vulnerable customers.
First, companies should implement a vulnerability policy, if they do not already have one, by January 2018.
For those where one is already in place, firms will review and ensure their internal policies are fit for purpose based on the principles of the guide.
Secondly, firms should also provide regular staff training on vulnerability awareness, and finally they should continue to share examples of good practice through the ABI.
The ABI’s recommendations are focusing on identifying potentially vulnerable customers, which can include the elderly, people with mental ill-health issues, those with physical conditions or disabilities, and customers with lower literacy and numeracy skills.
It could also include those who have faced a significant life event, such as a job loss, divorce or family bereavement.
According to Rob Yuille, assistant director and head of retirement policy at the ABI, “retirement decisions are complex for everyone, but some people in vulnerable circumstances will need additional help”.
He said: “This initiative highlights that providers really want to deliver the best possible service to all customers, and take their responsibilities towards vulnerable customers extremely seriously.
“While there is already much good practice in the industry on identifying and supporting vulnerable customers, this guide will help all firms better identify those customers who need more support to help them make the right financial decisions.”
Emma Bould, programme partnerships project manager at Alzheimer’s Society, argued that a big challenge for people who are living with dementia is dealing with insurance companies.
She said: “The issues they have raised include understanding whether a policy is still valid after diagnosis, discussing dementia with people in the insurance sector who do not understand the condition and its progression, and the wording of policies being confusing or not applicable to people affected by dementia.”
According to Ant Scammell, service development director at Old Mutual Wealth and a member of the ABI working party, vulnerable customers will often be dealing with several financial organisations in times of need.
He said: “We have instances of clients with terminal illnesses who have had to cope with three separate companies all who have different processes and requirements.
“As an industry, we need to agree a customer-led, cross-industry approach to core processes instead of working in silos.