A debate has raged for many years about the way new and existing customers are treated across all sectors, and whether new customers receive a better experience.
Developing customer loyalty should be a key consideration for any business. The question is, are we doing enough within the protection market? It can be easy to focus on the needs of new clients and overlook existing ones, but doing so means missing out on opportunities to support them even further.
For advisers, taking on new clients has become increasingly challenging in recent years, with costs having spiralled, and securing quality leads has become more difficult.
Add in the responsibilities Consumer Duty will bring, requiring advisers to understand exactly how lead generators have sourced clients, and what was once deemed a straightforward part of the business strategy is now more complicated.
47% of advisers did not have a strategy to deal with clients wanting to cancel cover or reduce premiums
It therefore makes good business sense for advice firms to look at how they can drive additional revenue through repeat business and referrals, as well as ensuring income is not lost through losing clients or cover being cancelled due to financial pressures.
This is why having a proactive retention strategy is so valuable. There are many ways to develop this effectively, such as contacting clients regularly to consider any changes in their circumstances, review the original advice provided and ensure their cover is still suitable. There may also be changes in products or underwriting that could be factored in and could benefit them.
Sending newsletters and educational content to clients helps keep them engaged and makes it more likely they will be aware of and appreciate the value of the cover they hold through highlighting added value benefits and claims stories.
Some advisers even create their own annual statements to provide bespoke communications to individuals. By creating a strong connection with existing clients, they will be far more likely to see their adviser as their first port of call for any changes to their circumstances, additional cover or questions.
It can still be easier to submit a new application than wait for an insurer to adjust an existing one, which feels wrong
Guardian last year reported that 47% of advisers did not have a strategy to deal with clients wanting to cancel cover or reduce premiums. This shows the importance of a ‘reactive’ retention strategy too, working out how to deal with those requests as quickly as possible and raising awareness of the options available for those who need to reduce costs.
Insurers also have a vital role to play in delivering better outcomes for policyholders. It can still be easier to submit a new application than wait for an insurer to adjust an existing one, which intuitively feels wrong.
Annual statements have arguably never been more important in helping to reduce cancellations, ensure policyholders understand the value of the cover they hold and most importantly, know when they can claim.
Yet after more than 15 years of lobbying for annual statements, we still don’t have all insurers providing them, and for those that do, these statements typically need to be more engaging and informative to achieve what we need them to.
The most important part of supporting existing clients is at claims stage. My work with the Protection Distributors Group has helped improve the claims experience through its Claims Charter and Funeral Pledge initiatives, and we’re encouraging more advisers to get involved in supporting claimants as we know how valuable that is for both advice firm and claimant.
After more than 15 years of lobbying for annual statements, we still don’t have all insurers providing them
And while our industry does amazing work paying claims, we need to ensure these are processed and paid quicker. Service levels for claimants, who by definition are vulnerable clients, should be prioritised so they’re just as good, if not better, as those for new clients.
The Consumer Duty will make us all review the way we look after clients, and this should include existing as well as new ones. So, let’s invest more in supporting existing clients, grow client loyalty and reap the rewards this effort brings.
Emma Thomson is head of protection and GI propositions at Sesame Bankhall Group
