Getting claims right for customers (and the regulator)

The treatment of people when they’re making a protection claim is getting an almost unprecedented amount of attention from the regulator. Consumer duty and the related focus on vulnerable consumers clearly underpins a lot of the FCA’s thinking on these matters. In practical terms, and as we can see from the recent terminal illness market study, this means the regulator is concerned about the time being taken to pay claims and the treatment of customers during the claims process.

Indeed, protection advisers are likely to welcome this focus on claims experience. There is very little in what the regulator is demanding that they would disagree with in terms of how they expect clients to be treated by insurers. And while we’re definitely not complacent at Guardian, we believe many of the concerns raised speak to our strengths in terms of our approach and proposition.

Our claims report

This year marks a significant milestone for us for claims, as we’ve just published our first annual claims report sharing claims statistics on open product lines that have completed or are nearing completion of 5 full years of trading. That means for Life Protection, and Critical Illness Protection and Combined Life and Critical Illness Protection. Our Income Protection has some way to go before the statistics become meaningful, having launched last year, as has our Life Essentials product which launched earlier this year.

The report shows that Guardian paid over £15m in claims in 2023 to 150 families – consisting of over £7.5 million in life and terminal illness claims and over £7.5 million in critical illness and children’s critical illness claims.

We’re also delighted to be able to share that Guardian has paid 100% of all its life and terminal illness claims, which we believe is linked to our approach with Life Protection.

Our enhanced terminal illness definition can contribute to a better outcome at claim for those who are terminally ill, most notably with incurable stage 4 cancer and motor neurone disease, although Parkinson-plus syndromes and Creutzfeldt-Jakob disease are also covered. For policyholders who have our Life Protection, it means for these 4 conditions we don’t need to wait until their doctor can prove they have less than 12 months to live.

Guardian has also paid 92% of all its critical illness claims and 92% of its children’s critical illness claims.

Beyond the numbers

If those are some of the raw numbers, we’re also proud of other aspects of our claims record including the time we take to assess and pay a claim. We’re a signatory again in 2024 to the Protection Distributors Group Claims Charter, meeting the minimum standards required in terms of timescales. This year that’s of particular note, as the charter introduced criteria for the timeliness of assessment of claims forms and assessment of medical evidence once received, which has increased the bar to meet those requirements.

Separately, we believe that our beneficiary nomination offer, Payout Planner, has also expedited the claims process avoiding some of the snarl ups that can occur with the probate process. Indeed 68% of our policies now have this in place and the feature was used within 74% of our life claims in 2023. We’ve experienced first-hand how it helped us pay the money to the right person in claims where the couple were not married and there was no will. It also helped us avoid delays of 7 months on average, faced by those claims where the policy did not have beneficiary nomination or a trust in place.

The right support

Of course, the available support around and after claim is important too. We think that with more focus on this aspect of a protection provider’s service from regulators and advisers, claims support is changing in status from a nice-to-have to an important consideration when it comes to product selection.

It also helps us address considerations regarding vulnerability. We have a dedicated Claims Specialist for every claim and our claims support service, HALO allows us to offer the tailored support a claimant or their family needs. We work with a range of support partners to provide personal assistance to clients – including specialist neurological occupational therapy, legal, emotional, and personal nurse support. In some cases, our help might take the form of a small financial contribution if this is what the claimant needs most, for instance help with parking costs or childcare while we assess a claim.

There is an important human aspect to this support. It’s not AI that will support somebody during a claim, but an actual person, although we recognise the role of AI in bringing about a multi-channel approach to providing support in a way that best meets the customer’s needs. Through HALO for example, someone with a breast cancer diagnosis can be supported by an experienced cancer nurse from RedArc, who can help with all manner of advice in dealing with the consequences of treatment such as hair loss, help direct them to other sources of advice from charities and employment advice, but also provide an independent source of reassurance.

It’s this focus on the person that we believe can help make sure we’re meeting the regulator’s concerns and advisers’ demands. In terms of claims, protection needs to do what it says on the tin and pay out at time of need. But both the support available when making a claim and the post-claim support is a vital component of the package as well. We think efficiency in terms of payment and the appropriate support when it is needed should go a long way to meeting the regulator’s concerns while benefiting clients as well.

Phil’s article was published in COVER on 1 July 2024

Source

Guardian 2023 claims report, all claims with a decision made from 1 January 2023 – 31 December 2023.