Karin Lloyd discusses IP duration management
With all the changes going on in welfare reform and with income protection appearing to be one of the early targets for the simple products initiative, things should be looking up for this under-sold product….but only if the industry feels it can be confident of a profitable return.
One of the key financial issues in producing a profitable return is the duration of claim and the impact this has on reserves – longer than expected durations are bad news for a portfolio.
With all this in mind, it was good to attend a meeting covering the latest research in this area that builds on previous work done by Sir Mansel Aylward and the team at Cardiff University, and to get the little grey cells going after the festive season. While some of the larger insurers and reinsurers have rebuilt parts of their best practice models based on some of this research, there still seems to be an opportunity for more radical change across the whole industry.
Some key areas we could look at, in conjunction with customers and existing claimants, include:
- the starting point from which we are asking people for information. Is it an assumption, even subconscious, that most people are going to exaggerate and we have to catch them out? If so, how does this skew our procedures and affect the ongoing relationship with claimants that we know is crucial to successful duration management?
- the way we ask people for information. Written forms or telephone scripts tend to give people cues as to what we want to hear, reducing the weight we can give to what they are telling us and omitting completely the stuff that we don’t need for administration but which may be top of the claimant’s agenda. The telephone does offer more flexibility but only if enough time is allocated to exploring what’s important to the claimant
- the focus we have on claims interventions based around information-gathering and monitoring, as if an intervention can only be effective for the claimant’s motivation and behaviour if the insurer knows in detail what’s going on. Maybe we could shift some of these interventions towards using our expertise to prompt and help people to think constructively about their own situation, make resources available and trust them get on with it without always having to report back, except once there is an outcome to report
- tracking interventions in detail, whether monitored or not, and recording outcomes so that we have a better understanding of which bits of what we’re doing actually work in an insured population
- facilitating people who’ve been there and done it talking to each other - ‘this is what worked for me’, this is what’s normal in this peer group, etc
A lot of the opportunity in duration management stems from a change in mindset - as an industry we tend to think of ‘us’ on one side doing something to ‘them’ on the other side and perhaps it’s time, with claimants’ help, to get further into their shoes than we’ve ever dared to tread before.
Categories
Authors
- Alan Newman
- Alan Tyler
- Des Benjamin
- Gerry Warner
- Helen Tilley
- Jim Harris
- John Gilman
- Karin Lloyd
- Lucian Camp
- Marilyn Cole
- Matthew Clark
- Michael Kelly
- Mike Taylor
- Neil Sharp
- Paul Brooks
- Peter Barnett
- Peter Chadborn
- Peter Le Beau
- Phil Friend
- Phil Veale
- Phillip Cooke
- Rona Doyle
- Roy Chappell
- Stephen Walker
- Trevor Davies
- Willie Hamilton