Why partner with a value-add service provider?

Back then, there were perhaps one or two providers and the idea of including such services was for the most part viewed with scepticism and suspicion about the motives of insurers. How things have changed.

Today there is a wide range of services under the value-add umbrella, including GP services, health assessments, physiotherapy, mental health services, personal nurse support, to name but a few. Virtually all UK protection products now offer at least one value-added service and many offer a suite of them.

I suppose initially the reason that insurers invested in additional services was to differentiate themselves from competitors, and if not initially the intention it became increasingly clear that these services gave insurers the opportunity to provide more value than just the promise of money should the worst happen.

With the building blocks now in place, the time is right to leverage the value in value-added services.

The inclusion of good quality value-add services allows the industry to move from providing financial peace of mind to providing a much wider proposition to help customers proactively manage their health and get the right help promptly when required.

David Mead, chief executive of Futureproof, says: “We find it incredibly important to develop the conversation beyond an insurance policy. A quality proposition with a good added-value service moves the discussion to quality versus price.”

With the building blocks now in place, the time is right to leverage the value in value-added services.

Building trust

The insurance industry as a whole has worked hard to increase consumer trust over the years and I believe that a significant advantage from the growth in value-add services has been a contribution to increasing consumer trust.

With nurses and doctors in the top three most trusted professions according to the annual Ipsos Veracity Index, it is clear that a good quality service provided by qualified professionals enhances customers’ perception of insurers.

This is backed up by our research tells us that consistently more than 93 per cent of customers using our service have an enhanced view of their insurer as a result.

Customer impact

Feedback from customers using value-add services has demonstrated the impact and the importance they place on them. It is no exaggeration to say that for many customers the non-financial support they receive is life-changing, and it is not unusual for us to hear that the support a customer has received was more valuable than the money itself.

Commenting on value-added services, Tracey Clarke, one of the recipients of the Seven Families income benefit, says: “They are one of the many bonuses of income protection insurance that are so valuable above and beyond the financial aspects of such policies.” 

Even when customers are aware, it is not always easy for customers to access the services.

Several insurers make services available to customers and their families at any time, even if there is no reason to claim. This gives a tangible ongoing benefit to all customers, not just those who are unfortunate enough to have cause to make a claim.

Indeed, in some cases the use of value-added services at an early stage may prevent or reduce the severity of a claim. 

Leveraging the value

There is no doubt that the protection industry has an excellent range of value-added services, so it is really important that customers know about them and importantly how to access them.

Research from Pacific Life Re shows that good communication it is not always the case; only 18 per cent said they were definitely aware of value-added services included in their policy and more than 50 per cent were unaware or unsure.

Even when customers are aware, it is not always easy for customers to access the services. We regularly hear of complex journeys to access a service they are entitled to use – remember that customers recognising a need for services are likely to be going through a very difficult, often vulnerable stage in their lives and many just give up.

There is a real need for clear articulation of what is available to whom, when and what for.

Add into the mix that many insurers are now offering a range of value-added services covering a wide range of needs, this (despite being great news) can make things complicated and confusing for customers.

While technology has an obvious place – particularly to improve ease of access – it is important that when several services are available that they are presented and connected together, even if they are provided by different suppliers.

As the Financial Conduct Authority's customer duty obligations are designed to improve how customers are supported, it makes sense to review the whole customer proposition, harnessing value-added services to improve outcomes for customers and their families.

Assessing relevance and quality

With such a wide range of services available, it is important for insurers and advisers to articulate the circumstances that each service is relevant for. For instance, access to a GP 24/7 is extremely helpful for a parent worried about a child with a fever, whereas long-term dedicated nurse support is much more suitable for somebody going through cancer treatment.

It is also very important to assess the quality and adequateness of services. It is important that insurers look at what will actually be provided to their customers.

Value-add services create the 'wow' factor in the protection industry.

For example, a mental health support service may range from a helpline only with no structured therapy at all, or a small number of therapy sessions (less than recommended by NICE), to comprehensive mental health professional support with an appropriate number of structured therapy sessions.

There is no single benchmark for the assessment of quality, some services are regulated by the Care Quality Commission and information about providers is publicly available, others are not within their scope.

Customer feedback in the form of testimonials, case studies and survey results will be readily available from a good quality reputable provider.

Communication

As ever communication is key, by insurers, advisers and value-add service providers alike.

In that order, there is a real need for clear articulation of what is available to whom, when and what for. This needs to be regularly communicated to customers, whether via annual statements, customer portals or anything else that gets the message across.

Advisers can be forgiven for struggling to keep up with the wide range and rapidly changing value-add services landscape, and this is a challenge for the industry to find a simple, easy to digest way of comparing what is the equivalent of apples and pears.

With such high focus on value-added services within the protection industry, to truly leverage their value, it is important that companies do their due diligence when choosing who to partner with, that they ensure the appropriateness for their clients, and that more is done to demonstrate relevance and quality and communicate effectively with customers.

Value-add services create the 'wow' factor in the protection industry, in a way that simply a successful payment of a claim will not. 

Christine Husbands is managing director at RedArc