Advisers do not believe protection providers pay claims, according to Aegon UK’s Stephen Crosbie, who said that was the biggest myth which prevailed in the industry.
“We do pay claims. 97 per cent of all protection providers across the industry paid their claims last year,” Mr Crosbie, protection director at the firm, insisted.
“The reason they didn’t pay some of those claims, and it’s very few and far between that there are any claims that are contested, is usually because somebody didn’t disclose something on the application form, or they actually lied about something.”
In a video interview with FTAdviser, he said Aegon’s research among its own customers found 83 per cent did not know the business published its claims statistics though.
“That should be at the opening of any conversation with the customer. That’s a message to us that we need to be much more creative in how we use those claims stats in the industry to get over to our customers, we pay claims,” he admitted.
This was after its Protection Matters report discovered nearly half of UK working women do not have any form of protection policy in place and most with protection do not receive it through their employer.
Asked how protection products might be developed in the future for the workplace, Mr Crosbie promised lots of innovation in the space.
“What I think is going to happen in the future is you will see group risk actually serving a mass majority of employees, certainly with the big employers who generally will provide that. But for small and medium-sized employers they don’t often have access to those group risk benefits and really what happens is people will need individual cover,” he predicted.
“So I do think there will be a need for some simplified products that are nice and easy to buy, in the same way group risk is easy to buy because there’s free underwriting, so people can get in without having to go through rigorous underwriting processes and actually some simplified levels of cover will really work well.”
Mr Crosbie acknowledged advisers are well placed to identify the individual needs their clients have for protection cover.
He said: “As we all know, that’s the bedrock to your financial stability.
“If you don’t have the cover, should you not be able to work for whatever reason or if the breadwinner in a family dies… these are drastic consequences that come with that.”
Asked how more can be encouraged to discuss protection with clients, he replied a lot of advisers already do satisfy those protection needs.
“We need to make sure that is still part of the conversation advisers are having with their customers,” he added.