How advisers can improve the quality metrics with insurers

Mike Allison

Mike Allison

30 October 2023
Much of what we do in our daily lives is under scrutiny nowadays from ‘ratings’ for credit to ‘ratings’ for how we behave in taxis when we travel with Uber. This can ultimately have consequences moving forwards on our ability to access various services.

If we take that in to our business dealings in the world of advising, whether we like it or not, we are under scrutiny too.

For some time insurers have been collating data on the ‘quality’ of the protection cases we write – and of course this is commonplace in the mortgage lending world too, with the ultimate sanction in some instances being unable to access products for clients.

Since the introduction of Consumer Duty, more focus has been placed on quality of distribution and most firms will have some sort of ‘rating’ by providers on how they are performing against their peers across a set of quality measures. The scores can be used by providers to ultimately decide whether they wish to deal with advisers or not.

Consumer Duty brought a greater scrutiny on insurers to make sure they were aware of the quality of advisers who are distributing their products. Ultimately, they are ‘on the hook’ too if misdemeanours come to light.

In the past the focus has been more on lapses or cancellations and that has been the key measure.

Now things are changing, and with the principle of the avoidance of foreseeable harm to clients under the Consumer Duty, much of the scrutiny is falling on underwriting and the responses of clients to health questions affecting underwriting decisions.

There is little doubt the industry wants to clear up many of the misconceptions that exist on claims payouts because Joe Public still thinks insurers don’t ‘pay out’ at claim stage. While this is something of a myth in the Life, CI and IP world, the reality is that some claims still do not get paid because of what insurers generally refer to as ‘misrepresentation’ on application forms.

As claims scrutiny becomes more focused on this area we need to ensure all possible steps are taken to ensure misrepresentation does not occur, so at claim the surety of payout is there.

There are a couple of steps that can be taken to try to avoid this. The first, and probably the most straightforward, is encouraging clients to read through the application questions carefully and their responses to those questions before sending them to insurers. This sounds like ‘meat and drink’ to most advisers but believe me I have seen stats to the contrary.

As you know many insurers now contact clients post-sale and ask for confirmation of answers and some go further by sampling GP data.

One further step is to tell clients this is going to happen and to encourage them to respond to insurers. This will have a positive effect on your own CYD (confirm your details) scores with insurers.

The other step is probably a little more time-consuming and involves the improvement of soft skills in questioning techniques. There is little doubt that by drawing out better responses from clients when looking at health questions, the more accurate those responses will be thereby leading to less chance of misrepresentation.

In light of this, the question is, ‘Should advisers change their approach to soft skills during the protection conversation?’ – especially when it comes to the awkward underwriting questions.

Perhaps by putting protection in front of people in a different way, so they see more value in it. By focusing on getting the answers correct you can pretty much ensure that in the event of a claim the policy will pay out and allay any fears that it will not.

If the old adage of ‘what gets measured, gets done’ is applied then clients will more than likely open up and give the correct answers to the questions.

At Paradigm we recently held some soft skills workshops in conjunction with AVIVA and they were so well received we are now taking the recordings and turning them into learning material for new advisers and for those who either haven’t sold protection for a while, or for those who wish to look at a different approach.

Ultimately using soft skills questioning techniques doesn’t need to stop at underwriting – by broadening the subject of protection, by talking about income security and financial resilience, clients may see more value in purchasing it – something we are all working towards.

If clients do want to misrepresent their questions you are never going to stop them; but by explaining the value in getting the right answers it will not only help them but you as advisers. This is because insurers will no doubt continue to use quality measures as a tool to help themselves distinguish the quality of one firm from another.

In future, insurers could use the scores they collate for decisions on levels of commissions paid or indeed pricing for clients but for now getting it right means peace of mind all round.

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APCC MemberConsumer Duty Alliance

Paradigm Consulting is a Member of the Association of Professional Compliance Consultants and also the Consumer Duty Alliance.

Paradigm Consulting is a trading name of Paradigm Partners Ltd
Office address: Paradigm Partners Ltd, Paradigm House, Brooke Court, Wilmslow, Cheshire, SK9 3ND
Paradigm Partners Ltd is registered in England and Wales. No.09902499. Registered Office: As above

Paradigm Mortgage Services LLP
Office address: 1310 Solihull Parkway, Birmingham Business Park, Birmingham B37 7YB
Registered in England and Wales. Company No: OC323403. Registered Office: Paradigm House, Brooke Court, Lower Meadow Road, Wilmslow, SK9 3ND
Paradigm Mortgage Services LLP is a Limited Liability Partnership.

Paradigm Protect is a trading name of Paradigm Mortgage Services LLP
Office address: 1310 Solihull Parkway, Birmingham Business Park, Birmingham B37 7YB
Paradigm Mortgage Services LLP is registered in England and Wales. Company No: OC323403. Registered Office: Paradigm House, Brooke Court, Lower Meadow Road, Wilmslow, SK9 3ND
Paradigm Mortgage Services LLP is a Limited Liability Partnership.