According to the latest figures from the Association of British Insurers, UK insurers last year paid out 96 per cent of personal life insurance claims and 99 per cent of group claims for Covid-19 deaths, totalling £202m.
You might think a global pandemic with over a hundred million cases and approaching three million deaths worldwide would not only stimulate demand for life insurance, but send it through the roof.
But it didn’t. And the financial impact of the virus has even caused some people to cancel existing cover.
Perhaps people thought a global pandemic wouldn’t be covered. Or that, even if it were, those pesky insurers would find a way to decline the claims.
According to new research from Drewberry, 44 per cent of Brits believe insurers have paid out less than 50 per cent of Covid-related life insurance claims, which could go some way to explaining why sales didn’t increase dramatically.
I’ve even seen people I know (who used to work in the industry) posting on social media that taking the vaccine means your life cover might not pay out. Utter nonsense, of course — and, thankfully, the ABI recently issued a statement to confirm this.
The UK protection market is worth billions and, on the whole, insurers did a brilliant job dealing with the pandemic and making sure cover was still available without increasing prices. Yet we continue to do very little at an industry and mass consumer level about addressing some of these ongoing myths.
Putting out statements, claim statistics and case studies is great — but that’s the easy bit. Reaching millions of ordinary consumers with those messages — enough for people to believe them — is the hard bit. Are we even trying?
Let’s get support services right
Elsewhere, along with an increase in life insurance claims, the industry has seen a rise in the number of people looking to make use of the ‘added-value services’ included within their protection or health insurance policies.
Often seen as a ‘nice to have’, these services tend to include things like virtual access to GPs, mental health support and counselling, rehab, second opinions, health checks, and fitness and nutrition programmes.
As a result of the pandemic, GP appointments have been harder to get — certainly at a time that suits (rather than waiting all day for the phone to ring). Many treatments have been delayed, mental health has declined in many areas and people have been unable to access gyms and other fitness activities, so these types of services have started to play a more important role than ever before.
But it is also easy to assume that, just because these benefits are there, they are easy to use and worth having. Sometimes they cause frustrations for customers, often because they don’t know what is and isn’t included, or they struggle to gain access to the services.
We have spoken to many people who have gone round and round in circles trying to find out what they are entitled to and how to get it — first searching the website, then calling the insurer, which tells them everything they need is on the website or the app.
Apps can be very economical and useful for many services like fitness and nutrition programmes, but for GP access or mental health support and counselling, an unreliable digital process could cause more harm than good.
‘Oh, I gave up trying to use it!’ is typical of the feedback we’ve heard numerous times in recent months when talking about insurer apps for support and counselling services.
If we want advisers to promote these resources, we need to focus on the customer journey and outcomes. Because, if done right, these services can really help people, while also reducing claims and making cover more attractive to potential buyers.
Kevin Carr is chief executive of Protection Review and managing director of Carr Consulting & Communications