We may be trusted advisers to our clients, but insurers don't trust us
There, I said it. I've been skirting this topic for a few months, and it's finally come to a head.
Monday, September 4th 2023, 6:40AM 
6 Comments
by Jon-Paul Hale
I penned the draft for this the first week of August; I found myself angry for the first time, angry at the industry, enough to consider throwing my toys and giving up.
And this was before the mess Southern Cross created had been brought to my attention.
While most of the reasons are claims management, and many will say we're not paid for claims, the reality of the sales we make is we make a promise that the insurance company is going to turn up to do its job when it has to, so when it doesn't, that's on us to some level.
Trust, or lack of trust, has been the core of why I've been feeling this way this week.
- An insurer that unnecessarily delayed a client's surgery by over six months, which I'll talk about soon.
- Another insurer that initially declined a claim because they didn't understand the policy wording. It's since been approved.
- Another insurer still hasn't made policy changes for a client requested 12 months ago.
- Another insurer who is so slow with processing that I can get underwriting terms from another insurer in a 10th of the time it's taken them to communicate with their admin team. Both insurers are largely as busy as each other, one working well, one not so much
- A client sitting on a claim, desperately needing mental health support, and the insurer is unable to locate anybody who can help, and this is in the private system
- Another insurer, unable to manage policy admin, creates loads of unnecessary work with missed premium management because they can't get the basics right.
Of nine life and medical providers, two-thirds aren't performing to basic expectations on service delivery. Some things admittedly are out of their control, but most aren't, and this list is becoming a typical week. And I'm hearing it from others.
More specifically, our clients may trust us, but the insurers we work with don't. Even when you've worked damn hard to keep the story clear, transparent and straight, it's not considered.
The straw on this one is an insurer hell-bent on finding non-disclosure after being told numerous times that there is no prior medical history. It delayed the client's surgery over six months and left me in disbelief about what had transpired.
Claims picked up the initial claim directly from the client and dropped the ball. I got involved a couple of months later when the client couldn't get headway on what was what.
Disclosure needed checking off the back of a poorly worded GP referral.
Okay, let's do that. I got that done with the questionnaires requested, and the underwriter wanted more, so I did what we always do: run the extra medical info.
Nothing untoward other than a communications mess-up happens; it's just not ideal at this point.
The underwriter found nothing around disclosure for the claim; all is good to go. Ok, back to claims and the approval, right?
Nope, claims were still stuck in a loop on disclosure; another month or so, nothing, even after a few prods.
Ok, more senior people, what's up? Oh, claims don't care what the underwriter decided; they're doing their own review. Oh FFS!
Ahuh, you guessed it, they want a follow-up report from the GP on the claimed condition.
In addition to the GP referral and the specialist reviews and reports, all at the client's expense at this stage because of the delays.
A report from a GP in the middle of winter, when access to GPs is difficult to impossible and they're short-staffed.
What did we get back? The same damn documents they started with when the underwriter requested them.
After three levels of management asking what's going on? The answer I got was that the underwriting information came through me, the adviser.
Now you can guess how I felt about that, and I've told them so pretty damn directly, so I'm not going to name them here either.
Also, if you scratch the surface of most insurers, you will find the same fundamental distrust.
It's unfair to single out one when all of them have internal cultures of distrusting advisers, which I've also discussed.
Do they have grounds? Probably, there have been plenty of examples of shady behaviour over the years. But most of that has been historical, not current.
It's funny when you apply rules to operations; those skirting them tend to identify themselves and leave the industry.
Also, this isn't an attack on the people in our industry working for providers; thousands go to work every day and do a fantastic job.
This is directed at those who have control of the culture and process of our insurers. Most insurers are too hard to deal with for the average punter and nigh on impossible in certain areas for advisers, too.
I bet not one in these senior roles has actually stepped outside their organisation and tried the company out without their contacts and direct lines, either.
As you can imagine from this example, it's deeply concerning that the application and underwriting process with an adviser is considered untrustworthy for the claims manager to assess a claim.
That statement calls into question the security of the policies arranged with this insurer.
If the claim manager can't trust their underwriter to make the right decision, how can a client argue a decision that goes against them when it is incorrect?
In this case, not only was the decision incorrect, but the claim has now been approved, and the facts of the case were precisely how I had laid them out. Without a single pen mark, it is different.
In the end, the approval is done, but it's wasted hours with everyone concerned completely unnecessarily.
Will it change? I have strong doubts.
It hasn't in 11 years as an adviser; if anything, it's got worse with all insurers.
Dot the i's and cross the t's for compliance, but missing the bloody point of the activity in the first place.
This is before CoFI bites, which they're talking about repealing! This is just the BAU stuff, thinking it's helping us!
I've had a lot of faith in a path forward for independent advice under the new rules; I've also had my scepticism on this leading us to tied agency 2.0 if we're not careful.
Unchecked and unbridled bureaucracy is currently leading the charge, and I don't see it getting any better soon.
Insurers, prove me wrong and do better!
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Comments from our readers
I've had to setup and autoresponder to advise timeframe expectations as the service has been so horrible as to create additional work from clients wanting to know what's going on is getting in the way of the work.
Some (if not all) insurers give scant regard to that relationship and whether it is due to a lack of trust or an arrogance where privacy or regulation is used as the reasoning I don't know. What I do know is that after 32 years of advising my best outcomes are delivered where all parties work together,
The trust piece comes from some of the basic stuff that we are required to do that shouldn't be necessary.
I've commented elsewhere about AIA’s example of not having FAP’s sign off on new associated agencies (because the new adviser is surely going to get it right) while requiring us to copy the client in on adding an Airpoints number to their policy.
Both speak to trust and both demonstrate it being misplaced in some way.
I've yet to see an adviser joining somewhere or opening an agency that got it 100% right, at the same time the Airpoints bit is noise at a level of “I could have just done that” response from the client.
I get the reasoning, there's been someone doing something dodgy at some point.
Same with the offer of terms processes. We’re either trusted to do the job or we’re not, yet this babysitting bit with providers wanting confirmation we’ve communicated with the client is just BS.
It's noise on top of good process communication in my business for the clients. Resulting in regular “What's this about?” from clients when it's required by providers.
Just unnecessary noise making life harder for everyone. And people wonder why insurers are slower? Because they're busy wiping arses on basic stuff.
And after reading your article on how far we've progressed in the insurance business, then haven't, is music to my ears, not in a good way.
I have been saying over the last 6 months that 'back in the old days' and I mean 34 years ago with CML, we used to send 'memo's' to head office in WNGT, overnight courier and usually get an answer back in 2 days....then came faxes, then came emails and then lots of online venues which got (past tense) speedy, efficient, effective replies!
NOW....it seems the memo's going overnight to head office are super speedy compared to what we're dealing with today.
I don't want to be arrogant as we all make mistakes, or drop the ball occasionally, however,
I totally despair of our current turnaround times and lack of 'sense' in our industry. I thought it was just me getting older and less tolerant, but after reading your article, I realise I'm not alone.
The worst thing is, I have no idea how to fix it!!! So thanks for that...I think...sad but true.
We all try our best with what we have, but when there are clear barriers being put in the way we tend to shake the cage. Mistakes get made; it's how they are managed that's important, and there are some big ones not being managed at the moment.
You're spot on with what you have said; largely, we have no control over it or the ability to change it.
Just knowing it's not just you, goes a long way to keep the old brain pointed in the right direction.
The advantage today over old, even if it seems we've travelled back in time, is we have Good Returns and other social media platforms around. We now have alternative ways to bring issues to light and share the pain to apply pressure, and collectively demand change.
It also means providers can't isolate and feed advisers yellow snow like they had been able to in the past either.
The real test is going to be what the FMA does, because they are the only ones that can force change, and they have been lacking the tools to do that up to now. They may still be lacking them when it comes to providers.
In the meantime we make noise!
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