Claims keep advisers busy – but are they doing enough to help customers?

Craig Parker

Widespread increases in the number of claims across the life insurance sector are having a significant impact on financial advisers across Australia, according to national advisory dealer group Affinia Financial Advisers.

Affinia General Manager Craig Parker said: “Advisers are spending more of their time now than ever managing claims on behalf of their clients for living insurance*. The recent reporting by all major life insurance companies of large increases in claims on disability and income protection rather than traditional end of life insurance demonstrates the opportunity advisers can bring to consumers”.

“Disability cover and income protection over the past decade have become more popular as consumers consider the impact of not being able to work again. Trauma/critical illness cover in more recent years is also being taken up.”

The result is that the ratio of living to death benefits now sits at an historic high at 2.5:1.

*Percentage of Life (death) insurance v Living benefits insurance (Disability and Income Protection)

Source: TAL Accelerated Protection product.

But Mr Parker said that with recent reports that lawyers have been increasingly acting for clients during a claim, he was concerned many risk advisers were not stepping up to advocate for customers at such a time.

“The increased involvement of lawyers in claims is worrying because this is a role advisers should be performing on behalf of their clients. The involvement of a lawyer will not influence the decision of an insurer. Claims advocacy is the role of the adviser.

“The legal profession may not have the same intimate knowledge of a client’s (and their family’s) personal and financial situation as the adviser does. Nor do they hold the same strong relationship with insurance companies or  the understanding of  the intricacies of each specific product a client may have.”

Mr Parker said claims management is a crucial time for clients, and reducing stress and the time involved demonstrates the value advisers provide.

“Claims advocacy is a key service proposition of the financial advice profession and if this is not carried out during this current period of heightened claims, advisers are missing out on a crucial opportunity to demonstrate their value,” he said.

“This includes helping clients manage a disability, recuperation, return to work and other financial considerations.”

NB: Affinia, which is backed by TAL, operates an open product list (APL) business model that allows its advisers to recommend any life insurance product type from any insurer.