Clients bypass advisers on insurance claims

Advisers are missing an opportunity to add value to their clients through insurance claims according to the latest Association of Financial Advisers white paper.

The Value of Protection white paper, which is based on research conducted by the Beddoes Institute in association with the AFA and BT Financial Group, found that clients are bypassing their advisers and going straight to insurance companies when making a claim, despite wanting a more holistic approach to insurance.

“What these consumers expect is the relationship to be primarily with the insurance provider rather than the adviser,” Beddoes Institute psychologist Dr Rebecca Sheils said.

“When I asked what would you do to initiate the claim, almost all of [the respondents] said ‘I’d pick up the phone and call the insurer.’ They didn’t say ‘I pick up the phone and call my financial adviser.’”

The results come despite the white paper finding more than 70 per cent of consumers surveyed wanting a greater focus on holistic support during the time of claims.

AFA chief executive Brad Fox said that advisers could provide a facilitative role for consumers looking to claim insurance, as they already have a relationship with that client.

“So when we hear that the nirvana for claimants is an emotional intelligence relationship with the claims process, that’s where an adviser can facilitate a significant amount of bridging,” Mr Fox said.

“They already know the person who is claiming and they can facilitate that bridge to now knowing who is handling the claim.”

BT Financial Group head of life insurance Phil Hay agreed that going forward “emotional intelligence” needs to be more of a priority through the claims process.

“At a claims stage, the consumer is going through one of the blackest periods of their life so the relationship with the planner can actually help them and assist them and walk them through the claim,” Mr Hay said.

“In reality the more effective claims management we have, the more we look at the quality of life the better the return for the life companies.”

“Because yes it increases your costs but the knock on effect is that people do return to work better, their quality of life is better,” he added.

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