Protection providers should reward loyalty

Simon Davis

June 18, 2018

Simon Davis (pictured) is chief executive of Guardian

In our daily lives as consumers, there are a number of things we’ve come to expect. Not least that, in this competitive world, our custom and loyalty can’t be taken for granted.

Consumers feel, quite rightly, that a company should appreciate their status as existing customers. They expect to be seen as just as valuable as new customers, if not more. In most industries, this expectation has become the norm.

In fact, within some – retail and retail banking in particular – this concept has gone even further, prompting companies to reward existing customers through loyalty and retention offers, as well as preferential rates.

But protection has been slow to catch up. It’s one of the few industries where existing customers are often not treated as well as new customers. And this can have dire consequences on the perception consumers and advisers have of our industry.

For example, typically, when protection providers make improvements to the quality of their critical illness cover, the benefits are only available to new customers. So, someone who has had a policy for a number of years may actually have lower quality cover than a new customer.

When it comes to a critical illness – and the customer makes a claim as they’ve had a heart attack or lost their leg, only to find their ‘older’ legacy policy doesn’t cover it – that’s a really big deal.

Of course, behind the scenes it’s complex to make critical illness upgrades work. But the protection industry can and should make it workable to meet the customer’s natural assumptions of what’s fair.

That’s why at Guardian we’re taking a different approach. Not only are our definitions simpler and offering broader cover than most others, but we promise that if our critical illness definitions improve, in most cases we’ll apply the improvements to existing customers’ policies completely free.

If they have to make a claim, we check it against both the definitions they bought and the definitions for new customers. And we pay out if the claim is valid under either.

Occasionally, we may introduce changes that we won’t automatically upgrade. If this happens, we’ll offer existing customers the chance to pay to add them. The point is, your clients can access the improved cover if they want to.

We felt this was one area – among many – where the industry needed to change. Customer loyalty should be recognised and existing customers should be treated fairly. Just as they’ve come to expect.

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