With the deadline closed for Australian Financial Services Licence (ASFL) applications, life insurers are under pressure to be ready for 1 January 2022 implementation. Industry training practices are in the spotlight as ASIC considers whether claims managers and their employers are compliant with the new regulatory requirements under new laws passed in December last year.
After several years under the microscope, it would be easy for the life insurance industry to look at this increased scrutiny and regulation as a burden. But there is another way to consider the coming changes: as long-overdue recognition of the importance of the claims handling role in the insurance sector, and an opportunity to shift our industry’s claims handling culture.
A delicate balancing act
For years, the life insurance industry has worked to meet changing community and regulatory expectations but there is still more work to be done to ensure the claims team employs the right balance of technical and people skills to deliver the best claims experience. This work, however, is not the sole responsibility of individual claims managers. To meet the changing expectations of customers and regulators alike, the life insurance industry’s claims training culture needs to evolve.
Handling claims efficiently and with compassion is vital, and it takes significant talent. The life insurance industry is a highly regulated space and claims managers need to master very specific technical skills to engage with customers and make accurate and fair assessments. The reality is life insurance protects against the worst moments life can throw at us – and so, life insurance claims managers are speaking with people every day who have been through life-changing, often traumatic experiences. Considering this, there is a need to take a holistic approach to claims handling education and placing just as much importance on non-technical skills.
Claims managers are working within an incredibly complex framework. Customers want a swift outcome – but they also want to be heard and supported at difficult times in their lives. Claims managers need to find the balance between meeting regulatory requirements like appropriate response times, whilst demonstrating genuine empathy when helping customers. Unlike other parts of life insurance operations, there has not been an industry minimum standard of education required for claims managers. Instead, training and education have mainly been employer-driven.
Protecting customers and claims managers
The fact is that no two life insurance claims are ever the same. Some customers are facing short-term concerns with a clear end; others might have a claim that needs to be managed over many years; some might be anxious or traumatised, others deep in grief. Claims managers must adapt rapidly to each new situation, which can be stressful. Given the lack of minimum industry training benchmarks for claims managers, it is incumbent on life insurers to make sure that their claims people have the tools they need to not only support customers but also protect their own mental health. While ensuring a fair claim outcome is a foundational goal of good claims handling, helping managers navigate difficult conversations without compromising their own wellbeing is equally important.
Supporting the heart of the industry
Claims handling is the forgotten foundation of the insurance industry. It’s more than just processing a transaction, it’s about facilitating information in a world of ambiguity and our role is to be as close to our customers as we can be to help them through hardship, while meeting the regulatory standards. Changes like the AFSL requirements should be viewed by the insurance sector as an opportunity to accelerate the standard of the industry’s claims handling culture, and provide holistic support to both your people and customers.
David Campbell, chief operating officer, MetLife
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