Aviva is working on developing its protection proposition in 2023, improving service levels across individual and group insurance products.
The insurer will also shortly introduce cost-of-living support for customers, building on its existing low-cost, easy-access range of protection products, by introducing support such as flexible payment arrangements.
According to Fran Bruce, who became Aviva's managing director, protection, UK life, in 2021, there seems to be “no end” to the cost-of-living crisis right now, and therefore the company feels it is right to support advisers and their clients.
Even though its individual protection sales rose 9 per cent in 2022 - a positive sign "against the backdrop of a cooling housing market and amid the cost-of-living crisis", Bruce said there was more that companies and the wider protection industry could do to help customers.
We are developing more support for SMEs and their insurance brokers to understand their options. She told FTAdviser: “Sadly we cannot see an end to this right now.
"Therefore, we must take great steps forward in terms of customer understanding, the clarity of our communications, the development of our products and services, and to ensure that our systems are continually modernised.”
Over the past 12 months she said Aviva had been working hard on developing its proposition and using data analytics to help drive protection sales into the UK market.
This will include extending current technological developments on the closed books that Aviva owns. “In terms of the legacy books, we are getting on with it”, she said.
The company also wants to “harness the power of data analytics”, according to Bruce, who said: “Can we get to a point where we are almost able to auto-accept?
“It’s a big challenge but there are between 10 per cent and 15 per cent of claims that we can pay on the same day, effectively. We want to raise this.”
More than a statistic
She said there are a combination of things with a strong growth story and said there had also been strong momentum in the first quarter this year.
Bruce also pointed to strong claims statistics, which as FTAdviser reported, showed Aviva had a 98.3 per cent paid rate on IP, meaning a £1bn payout in protection claims.
But she said claims statistics were not enough. “We are now focusing on the level of experience a customer receives and how to make it a better experience for claimants."
| Aviva's 2022 protection polices and payouts. Source: Aviva | Number of claims paid | Value of claims paid | % of claims paid |
| Life insurance (inc: terminal illness benefit) | 41,002 | £683,638,563 | 99.40% |
| Critical illness( inc: Children’s Benefit + Total Permanent Disability) | 4,689 | £334,070,894 | 93.50% |
| Income protection | 3,683 | £50,636,470 | 94.30% |
| Fracture cover | 866 | £2,185,300 | 89.70% |
| Hospital/Trauma/Therapy/Carer cover | 355 | £531,177 | 99.20% |
| Totals | 50,595 | £1,071,062,404 | 98.30% |
Part of this is to do better communications around lapses, such as cancelled direct debits.
“This always has triggered correspondence, and we have always offered a grace period, but we have been trying to make our wording a little more clear for customers”, she said.
Another development is to align the wording on critical illness policies to new Association of British Insurer standards, while continuing to tweak the value-added services that come with Aviva’s protection policies.
The company is also set to carry out research among generation Z, to understand what their wants and needs are and how to approach them.
Group side
On the group protection side, Bruce said Aviva was keen to work with advisers to help close up the “protection gap” among small- to medium-sized businesses.
According to Bruce: “Advisers have a great opportunity to fix this, so we are developing more support for SMEs and their insurance brokers to understand their options.
“For example, we are looking to encourage employers to discuss flexible benefit arrangements with HM Revenue & Customs, rather than just give employees a once-in-a-year opportunity to change their benefits.”
We are also considering...where we can look at pricing in a more targeted way.The company is also doing work around education on how group IP can serve different occupational groups, and explaining how the deferred period works to help advisers serve their small employer clients.
“We are also considering different segments of the market and where we can look at pricing in a more targeted way”, Bruce said.
By doing this across individual and group, Bruce said the company was hoping to close up that protection gap, whereby approximately 50 per cent of the UK population is under-insured or not insurers at all.
simoney.kyriakou@ft.com
