ProtectionSep 26 2017

Communication breakdown: Calls for annual protection statements

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Communication breakdown: Calls for annual protection statements

The number is growing, too, with recent converts including AIG Life, which introduced an electronic statement in July, Royal London, which started a 5,000-customer pilot in July, and Scottish Widows Protect, which introduced them last November having already done so for bancassurance customers for more than 10 years. 

However, while this is a positive trend, there are still many insurers that do not provide regular communications to policyholders. Without this flow of information it can also be difficult for advisers to step in and provide an annual statement directly to their clients. 

Ms Thomson says: “We do send more generic communications to our clients, but unless an insurer sends us policyholder information, we would never know if they had made any changes to their cover. After four years, when clawback ends, we would not even know if the policy was still live.”  

Communication benefits 

There are plenty of benefits associated with sending out regular protection statements. For starters, it helps to ensure that clients’ cover keeps pace with their lifestyle. Flagging up the current sum insured and the guaranteed insurability options enables policyholders to increase cover for life events such as having a baby, getting married or taking on a larger mortgage. It is also a good excuse to remind policyholders of the benefits that are included with their policy. 

As an example, Paul Roberts, head of protection at Old Mutual Wealth, points to the intensive care benefit on his firm’s critical illness insurance. This pays out the full value of the plan after someone has been in intensive care for 10 days. 

“Very few people would remember every benefit they have, and even fewer would remember what was included on a loved one’s policy. By providing a regular statement, you help customers gain a better understanding of what their policy does,” Mr Roberts explains.  

This also extends to added value benefits such as second medical opinion services and helplines that are commonplace on protection products. These can often be used by the policyholder and their immediate family, and are available regardless of whether or not they are making a claim. It also feeds into the treating customers fairly regime. 

Nick Erskine, head of intermediary sales at AIG Life, points out: “We need to do everything we can to ensure that cover is really clear for our customers. They understand what they have bought on day one, but it is unlikely they will consider it again unless you remind them. This creates more trust and helps to build a better relationship.”