Artificial Intelligence’s (AI) ability to ‘industrialise’ the complaints process as well as poor service levels from insurers and advisers alike are some of the key reasons behind increasing health and protection grievances.
This is according to advisers Health & Protection spoke to following data last week showing private medical insurance (PMI) and protection complaints to the Financial Ombudsman Service (FOS) had increased year-on-year across virtually all major product categories.
Income protection saw the largest uplift in terms of number of complaints and percentage growth, followed by critical illness (CI) insurance and then medical and dental insurance.
Throwing the question of why complaints are increasing over to advisers, it appears quality of advice, insurer service levels and AI making it much easier for customers to craft complaints are just some of the contributing factors behind the increase in grievances.
Advice quality
Kristian Breeze, director of healthcare at Ascend Health, tells Health & Protection he believes this latest increase in complaints is not simply a product issue, but an advice quality issue.
“Health and protection advice is becoming more visible, which is positive, but it is also attracting people who underestimate the seriousness of what they are dealing with,” Breeze says.
“The barrier to entry can feel low, the commissions can look attractive, and too many people assume that if they can sell a mortgage or talk confidently about finance, they can advise on life insurance, income protection or private medical insurance. That is a dangerous assumption.”
Breeze points out that these products are not just policies.
“They are often the difference between a family keeping their home, a client accessing treatment quickly, or a business surviving the illness or death of a key person,” he continues.
“Poor advice may not show up immediately, but it can have devastating consequences at claim stage, when the client is already vulnerable.”
Influence of social media
Though Breeze also acknowledges the small but growing influence of social media.
“A quick look at TikTok or Instagram shows plenty of ‘finfluencers’ offering simplified, unsolicited views on protection and health insurance, often without context, qualifications or any understanding of underwriting, exclusions, trusts, claims or client vulnerability,” he continues.
“That does not help consumer understanding. It creates noise and, in some cases, unrealistic expectations.”
In terms of tackling the problem, Breeze suggests firms first need to be honest about competence.
“If you do not properly understand health and protection, you should not be advising on it,” he adds.
“Referrals to specialists should be seen as good client care, not a missed sales opportunity.
“Secondly, insurers and networks should do more to support proper training, not just product training. Advisers need to understand the real-world implications of their recommendations.
“Finally, the industry needs to keep raising the standard of advice and challenge the idea that protection is an easy add-on sale.
“The answer is not to make advice less accessible. It is to make sure the people giving it are competent, accountable and fully aware of the consequences when they get it wrong.”
No surprise
For Rhys Schofield, protection adviser for Peak Mortgages and Protection, the increase in complaints comes as no surprise.
“I’m not surprised to see complaints rise against a backdrop where brokers feel service from providers feels like it has gotten worse,” Schofield says.
“We’re in a world where some insurers are taking weeks to assess or respond to information which is a recipe for disgruntlement and it does feel like sometimes I have to ask multiple times to make sure important information is actually actioned.
“How many people just assume if they’ve asked it’s fine, only to find out on a claim that it wasn’t?”
Creaking under increased workload
Addressing PMI in particular, Schofield contends that the rapid growth in the market has left parts of the private healthcare industry “creaking” under the workload.
“Heck I had to see a private specialist on my plan and it still involved a multi-month wait to get an appointment,” he continues.
“Against a backdrop where there are real shortages of some specialists, clients expecting things instantly are going to find the reality jarring.”
Context needed
Isaac Feiner, managing director of Lifepoint Healthcare, maintains the complaints figures need context.
“PMI upheld rates actually fell from 26% to 22%, year-on-year. More complaints does not mean more wrongdoing,” Feiner continues.
But Feiner maintains the single biggest driver of complaints is AI.
“Complaining used to cost something: time, effort, knowledge of the process. AI has removed all three,” he continues.
“Anyone can now produce a detailed, well-structured complaint in minutes, counter every response automatically, and sustain a dispute indefinitely.
“We have effectively industrialised the complaint process, and the FOS numbers reflect that.”
Cost pressure
However a further factor is cost pressure, Feiner adds.
“When premiums rise sharply, policyholders scrutinise their cover more closely, and dissatisfaction with exclusions follows,” he continues.
In terms of what might help the situation, Feiner calls for clearer communication of exclusions at point of sale, and faster claims handling.
“Most complaints that reach the FOS could have been resolved earlier. The access to information that AI provides consumers is actually a prompt for the industry to raise its standards of clarity and responsiveness,” he concludes.