How do we 'demystify' the insurance claims process?

Kiwi insurer talks about measures it's taken to simplify the insurance claims process

How do we 'demystify' the insurance claims process?

Insurance News

By Terry Gangcuangco

The insurance industry has long had a bad rap when it comes to claims – a negative image, warranted or otherwise, that is far from what Fidelity Life is projecting, what with the measures the Kiwi insurer has taken to make the claims process clear and prevent itself from having to decline claims.

“Our overriding philosophy is that we want to pay claims to our customers,” Fidelity Life solutions and services head Trecia Brown (pictured) told Insurance Business. “We paid out more than $142.9 million in claims for FY22 (financial year from July 2021 to end of June 2022) and continue to work towards educating advisers and customers so we can avoid turning down claims.

“We actually introduced a customer claims brochure last year, which outlines the most common reasons why claims are declined and ‘demystifies’ the claim process, so customers have a better understanding and to tackle this very issue.”

In FY22, 93% of all claims received by Fidelity Life were accepted and paid. The remaining 7% were thumbed down for reasons including a claimant’s failure to share relevant information during policy take-out, the policyholder’s condition not meeting the medical definition, and a worker’s return to work prior to the end of the wait period. Making sure clients completely understand the insurance claim process is important.

The common conditions paid out for by the life insurer were cancer (32% of successful claims); injury to bones, muscles, limbs, and joints (17%); cardiovascular conditions (13%); respiratory conditions (5%); spinal injuries (2%); and neurological conditions (1%).

Based on what Fidelity Life is seeing, cancer is expected to continue to be the most commonly claimed-for condition, amid greater public awareness and the availability of advanced routine screening. Earlier this month, the company rolled out its “Cancer companion” offering for trauma cover policyholders.

“Over the last 12 months we’ve also made changes to customer documentation, removed financial jargon from policies, simplified some cover options, revised our wording on all customer communications, and developed simple Life Insurance 101 videos to ensure everything we do and stand for can be more easily understood,” Brown went on to tell Insurance Business.

“It’s all part of our customer-led transformation and steps towards increasing transparency so our customers are better informed and have a deeper understanding of their cover.”

Playing a “huge” role on this front, said the solutions and services head, are financial advisers whose remit spans understanding the needs of the insured and making suitable recommendations.

Brown highlighted: “[Advisers are] there to ensure customers understand the different financial products and how they can benefit or protect them and their families. Especially in life insurance – where regular reviews are required over the course of a lifetime, ensuring you have appropriate protection in place to keep up with changes in your or your families’ lives – advisers are a source of trust and knowledge.

“That’s why we choose advisers as our main channel, because they help customers have a deeper understanding of their protection and financial position, and deliver greater long-term outcomes for our customers… We also continue to inform and educate our advisers on why claims were turned down so they can be fully informed on behalf of their customers and avoid any disappointments.”

Meanwhile, according to Fidelity Life, they are witnessing increases in mental health claims and musculoskeletal disorders or injuries. Overall, in the year ended June 30, Fidelity Life compensated customers in more than 1,300 claims. The insurer, on its website, has a step-by-step guide outlining what customers can expect when making a claim.

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