New Zealand insurers are proud of their claims payout record, and justifiably so with $1.33 billion in life insurance claims paid in the 12 months to June 30, 2018*.
Speaking at the Insurance Council Conference, Harding stated that around 20% of Tower claims are withdrawn, and was reported as saying: “customers think there is some trick, some technical clause, or a reason they don’t really understand about why we can avoid paying their claim.”
“As an industry we proudly go out and talk about the fact that we pay the vast majority of claims, and only a minute number are declined. And that may be technically true, but is that what customers think? Is that what they actually experience?”
And that - whether in F&G or risk insurance – is the crux of the matter. Stats aside, what do customers actually experience at claim time? Could the process be improved to ensure Kiwis with legitimate claims don’t throw their hands up in frustration, confusion or, worse still, hopelessness?
We need to help New Zealanders secure the protection they need, but to do that we must have the trust and confidence of the public. Whether the percentage of claims withdrawn is 20% as Tower has cited, or 10% as AA Insurance commented shortly after, or another figure, Harding has highlighted an opportunity for the sector to better serve Kiwis and to increase confidence and trust.
So, what can we do? What can the industry collectively look at to alleviate the issues Kiwis encounter at claim time? What are the key factors that dissuade Kiwis from completing the claims process and, in doing so, create a poor experience and lack of trust?
Keep it straightforward, from the beginning
Ensure that policies are simple, concise and clear, so that the average New Zealander can easily understand what they are covered for, any exclusions and other pertinent details. We need to move swiftly away from 40-page policies in size eight font, in language that can be perplexing even for those in the industry.
It’s not an easy undertaking, and one that would need to support the continuation of innovation and product complexity. But we do need to deliver policies that Kiwis can easily understand, and, with that understanding, feel empowered in their insurance choice and confident in the sector the serves them.
Less hassle, more confidence
It’s fair to say that most Kiwis could cite a personal example, or one that was shared at a weekend BBQ, of the seemingly endless paperwork and verification required to complete a claims application or process.
While ensuring the information the insurer needs to accurately assess a claim is provided, we need to find solutions that streamline the information-gathering requirements for claimants. Aiming for a one-touch claims process rather than three, four or more will not only dramatically improve the experience, but will also aid in helping Kiwis feel confident with the process. And what comes from confidence… trust.
Highlighting that expert help is at hand
Examples of clients not being aware that they have a claim to make before speaking to an adviser are numerous. Examples of the lengths that advisers go to, to help their clients understand and navigate the claims process are even more so.
Advisers understand – and feel – how unfamiliar and daunting the claims process is for clients, and play a crucial role in advocating for their needs at this often harrowing time of life. Ensuring a thriving insurance advice sector is essential in being able to provide an expert service for New Zealanders at claim time.
Making the changes together
It’s great to see insurers taking a stand - proactively identifying areas of the insurance process that are creating barriers for New Zealanders and highlighting an opportunity for collective change.
We’re all on the same page – we all want to best serve the Kiwis that seek our help and, in doing so, build public confidence and trust in the insurance sector. But it cannot be done in isolation; it will only be achieved by all participants committing to the opportunities for the change – a rising of the tide so to speak.
*Financial Services Council, Spotlight on Insurance June 2018.