Why does the sector suffer from such poor standards? And what are we providers doing to rectify and improve the situation?
The main reason, as those involved in the industry would testify, is that there is an extraordinary amount of administration involved. For example, a group insurance policy will be reviewed annually. In addition there is a bi-annual review of the rate, which means new quotes and possibly new underwriting.
There has also been much consolidation in recent years due to a number of providers pulling out of the market. Providers, however, cannot shirk their responsibility to improve service standards simply because the process is complex.
Many providers are looking at innovative new ways to improve their service. In the individual protection sector, providers offer the intermediary the ability to quote, track and start policies online. However, group providers have only recently recognised these benefits and begun investing in the technology to allow group schemes to be placed online. This cuts administration time enormously, which benefits not only the employer but the intermediary too.
At Canada Life, our key innovation, and investment, has been our online CLASS system, which provides intermediaries with an end-to-end administration solution online for schemes between three and 100 lives. An intermediary can quote, assume risk and renew a scheme online in just 30 minutes. While this, and other similar systems in the group market, cater for smaller schemes which benefits those placing SME business, larger schemes cannot yet be placed via this method.
But should investment and innovation be the first step or instead should providers look internally at their own processes and focus on taking things back to basics?
We believe the key to improving service standards is to change how we, the providers, handle administration in order to improve the service we offer to the client. For many years it has been commonplace for a group scheme renewal to take at least 35 working days to complete. By adopting an internal initiative at Canada Life, we have reduced this to just five days, and are challenging the rest of the industry to match it.
The Steering Committee of GRiD has recently set up a working party to tackle service standards, which I am fully supportive of. As the chairman of the GRiD ‘Raising Group Risk Benefits Profile’ working party, I will look at how we can work together with the industry to improve the market in general.
Anyone working in the group insurance market will be aware that a variety of process improvements have recently come to light in the medical underwriting arena. ‘One-and-done’ underwriting – where individuals can effectively be underwritten just once and not again (up to certain limits) has been introduced across all group products. This, in addition to increased free cover limits of £1.25million for group life, has helped speed up the underwriting process, meaning the need for underwriting on smaller schemes is removed, allowing intermediaries to concentrate on writing business.
Tele-underwriting is another recent advance that, although not commonplace within the group market, is likely to become widely used among providers in the near future. By employing specialists to obtain detailed information over the phone, the need for doctors’ reports is reduced, further improving servicing standards. Improving service standards is high on all providers’ radars, and we are getting better. However, we are always looking at ways to improve, and this is where we ask for your support. Your feedback is key to improving the process. Please keep telling us what you want and what your clients need and we will do our utmost to fulfil your requests.
With your help, along with our investment, development and dedication, we can drive service standards forward and grow the group protection market together.