What matters more to you?
- The peace of mind you get from knowing you have financial benefits you can claim for you or your family
- Having access to things you can use on a day to day basis, mostly without being a claimant
It’s a conundrum. No-one wants to claim for death, disability or the diagnosis of a serious condition. Is the true value found in the support services which insurers provide? “Support Services” is how we describe the plethora of great things we do, beyond providing a financial benefit, with our quality suppliers.
They have been called many things over the years – additional services, value-adds and worse. The truth is they are integral to the offer, not extras or optional bolt-ons. Our joint aim should be to do all we can to help people when they have a significant change in their life circumstances. While supporting people from a financial shock is one important thing we all do well, we can, and need to, do much more than simply provide money.
While the group insurance market has led in this regard, with second medical opinion services and employee assistance programmes launched in 2006 and 2008, the individual market is now actively engaging with suppliers and bringing further innovation and engagement to the protection arena as a whole.
Support Services are free to use, leading to a challenge with messaging. Should we make that clear or does it diminish their perceived value? They are not free; the insurer pays for them and the costs are factored into premium pricing. Purchase costs for insurers with large volumes of employees to be covered are much lower than retail or personally-funded support services. Nor are they an optional part of the product proposition. They are either used, with the help of great promotional materials, or they aren’t.
There is a conflict here between something that is offered for ‘free’ and the quality imperative that lies behind what insurers are able to provide. As significant purchasers, insurance providers can negotiate strict Service Level Agreements in place, monthly reporting and account management to address any challenges or initiatives to implement. These services are heavily invested in, and that investment is only worthwhile if they are being used regularly and consistently by employers and employees. Certainly they are not simple marketing gimmicks. At the point of use, especially during a claim, we believe that our Support Service providers do amazing work providing an outstanding level of support for those who need it.
For example, employees who are insured under a Canada Life group critical illness policy get £205 of extra value by dint of their employer having that benefit; £180 for group income protection and £30 for group life assurance.[1] For employees this is at no cost to them versus what they would have to pay if buying personally. Not only is this great for Total Reward Statements, demonstrating an increase in employment value and a sound business reason to have group risk, but employers should also be confident that the suppliers are of the highest quality. Employers look brilliant when the worst happens and when the support services are used. The feel-good factor should not be underestimated!
Following on from the (incorrect) belief that these services are not core to the product offering, when someone, or an entire organisation, does not want to use a service, perhaps because they have something else in place, they may ask for a premium discount. Such requests cannot be accommodated.
Insurers leverage economies of scale, so some things that cost tens or hundreds of pounds may only cost pennies or pounds when bought in volume from a supplier. Non-engagement is already factored in to pricing and so the price stays the same whether the support service is used or not. Employers are not paying for something they are not using – as with much in group insurance, cost is managed across the whole portfolio. All of the support services are non-contractual parts of the policy and usage and promotion is optional.
Which brings me to a final conundrum: advisers may not wish to promote these services, fearing their clients will love them so much they will lose their broking fee because the employer will want to stay with the insurer without assessing their other options in the market. While claims are vital to the existence of the policy, the support services ensure regular contact with an insurer’s offer. With one survey claiming that 44% of customers have had no contact with their insurer, we see this as an important issue to address. Regular promotion of support services reminds people they exist alongside the associated insurance policy, meaning that no opportunities to claim are forgotten.
For insurers and advisers it also assists with retention at many levels. Neglecting to promote the support services means other advisers can sneak in by talking about them and the client is lost. Where budgets are tight, with increasing expenses (auto-enrolment pension contribution increase, apprentice levy, national minimum wage increases, etc.), a policy with no claims and no support service utilisation may be the first thing to consider cutting. The smartest advisers are offering support services comparisons in both their broking reports and their acquisition of new appointments for their client. This has the dual benefit of talking value and not price (important in a commission environment) and gaining extra fees for comparing insurer offerings and ultimately making sure they are used.
In summary, we need to make Support Services something that employers and employees want to use rather than ignore. We are clear on supplier quality, but is it made clear that they are free to use and group risk adds real monetary value to employees’ total reward? There is no premium increase or reduction for their use or otherwise so employers, working with their advisers, should look to promote them wherever possible. Finally, advisers should embrace their existence to protect their current client bank, grow new revenue streams and enable genuine value, not price, to determine an insurer’s worth.