Opinion: 200 years old

A friend of mine recently sent her policy into BigCo for a change of policy owner. Her experience tells us just how far life insurers - even one that is arguably amongst the best - have to come to measure up to the standards we see in banking. I can't tell you how much it hurts to say that, as banks haven't exactly covered themselves in glory recently.

Wednesday, March 17th 2010, 2:20PM 1 Comment

by Russell Hutchinson

So, we'll call our friend Mavis. Mavis needs to change her policy and calls the insurance company. Along with signed transfer forms, astonishingly, they ask for the original policy document back. This is term insurance. Remember - I can trade millions of dollars of financial instruments using a log-on code and a password, but I need to send back the original of a term insurance policy.

Then the company makes the change and sends a policy document back - but it's not the same one. They've replaced it, and the wording has changed. Mavis calls us to complain - she knows it's the wrong policy because she had underlined some of the wording when discussing something with her broker in a meeting shortly after she first received the document. We shall pass over the more paranoid reasons it's possible to invent for making the switch, and assume that it was merely incompetence.

I need not even go into how long this all took - as I am sure you can imagine. Nor the frustration and waste - both for Mavis and the insurer - and this is the key. Even with their imaged files and smart computer systems they are stuck in 19^th century thinking. They don't realise how much money this cost them, and repeated thousands of times over, its cost them a fortune. Time for a change.

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Comments from our readers

On 18 March 2010 at 1:47 pm David Whyte said:

Well, here's a tale for all IFA's to contemplate. I was recently made aware of a case of an adviser being requested to restructure a client's risk portfolio and to submit the relevant documents to the (same) company for processing. It was communicated to the Adviser that, as this was a bank client, the bank would be offered the opportunity to contact the client, address issues the client may have, and retrieve the relationship. Not surprisingly, the IFA was taken aback and enquired if the same accommmodation would be provided if the situation were reversed, i.e. the bank had received instruction from the client to re-organise an IFA designed/installed risk programme. Would it surprise you to learn that the IFA was informed that they would not be given the opportunity to rescue the client relationship and that the same facility would not be given to the IFA? Changed days indeed!

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