October 2019 | Protection

Charlotte Harrison: Unlocking protection potential

Charlotte Harrison is product manager at iPipeline

I was recently shown an advert online for a homemade canoe. The description read: ‘I built this canoe in 2009 using marine ply, tape and epoxy resin…It has been used once only, we decided it was inherently unstable and not fit for purpose…

If you are braver than me or fancy a project this could provide hours of fun. Be sure to wear a life jacket!’.

The craftsman behind this homemade monstrosity and the man that wrote this unusual advert is my Dad. I also had the dubious privilege of witnessing the canoe being built as well as seeing its first, last and only launch.

Once I had finished laughing at his sales pitch, I pointed out that no one would ever buy something with this description.

I was wrong. It sold, and incredibly went for over sixty pounds, not bad for something that is advertised exactly as is. No embellishments, nothing hidden.

The thing I found interesting about this was the way my dad’s absolute honesty clearly worked.

Someone still bought it, they weren’t put off by what the product didn’t do. Maybe they appreciated and trusted such an honest product portrayal and it completely managed their expectations on what they would be getting. The buyer knows they should wear a life jacket. 

Whenever you buy a product, from small purchases such as clothing and food to large items such as a car or house you really want to know exactly what you are buying.

You want to know that you aren’t being mis-sold and that your purchase is fit for purpose.

It’s why I paid for a survey when I bought my house, check the ingredients in food products and head to review sites before I book a holiday.

I think this mindset applies to everything a consumer purchases. No one likes to end up with the wrong product; a house with subsidence, a lasagne containing horse meat or a dodgy hotel under a flight path. We want to be able to read, understand and trust what’s on the label.

For me this is particularly applicable to the life insurance industry, where ending up with the wrong product can have a massively detrimental impact on both your long term financial and emotional wellbeing.

We know that as an industry we still have a long way to go to build consumer trust. Recent surveys have highlighted that 55% of insured and 68% of uninsured consumers believe that providers will actively try to avoid paying claims.

That’s not a great reputation to have. some 73% of that 55% (insured consumers) have actually gone through the claims process and still don’t trust that providers will payout.

What’s going wrong and why don’t consumers trust the insurance industry? To have trust you need to have clarity.

I think a large part of the disconnect comes down to the simple issue of poor communication. Consumers don’t always know what they are purchasing, and not fully understanding your purchase is a great way to have your confidence eroded.

This is supported by the fact that a large proportion of claims not being paid out were due to customers claiming for a condition that wasn’t covered, as well as pre-existing conditions not being adequately declared.

As an industry we didn’t get that all important labelling right. So, what can we do to ensure customers know exactly what they are purchasing?

The good news is we have already made a start with a movement towards simpler and clearer policy wordings.

This is a great step forward in solving the problem, but there’s still more progress to be made. Advisers are also key to addressing the issue of consumer trust. Having the wrong cover can be avoided by getting the right advice at the right time.

Advisers have the knowledge to understand policy wordings and make sure the product is suitable for their client.

Maybe their client has specific medical conditions or an unusual hobby that isn’t covered as standard.

Advisers are in a great position to explain the importance of disclosure to their client and the impact this can have on their claim being paid out.

So, whilst as an industry we often focus on claims statistics to build trust and prove to consumers that their policy will pay out (I think I can probably quote a lot of these by heart now), this misses the bigger picture.

I don’t think statistics in isolation are the way to a consumer’s heart. As a consumer I want an open and honest dialogue. I want to know that nothing is going to be hidden.

I want to know that my policy is covering what I need. It’s frustrating if some things aren’t covered, but it’s far better to have this knowledge up front than at point of claim.

Let me make an informed decision based on all the facts. If paddling in an ‘inherently unstable’ canoe isn’t covered then maybe I will find a different hobby, look for a policy that can accommodate me or accept that at claim stage I won’t be covered.

At least I’ll know what I’m signing up for. As an industry let’s keep making policies easier to understand, and even if a consumer has heard it all before, there’s no harm in walking them through exactly what their policy covers… again.