Advisers have reached no clear consensus over whether insurer service levels have improved or not while consumers want faster service from insurers in terms of applications and paying claims.
More than a quarter of consumers think protection application processes should take no longer than 48 hours for those with no complex health conditions and a similar number expected to receive their claim payout inside a week.
This is according to the Association of Mortgage Intermediaries (AMI) fifth Protection Viewpoint Report – Making Protection Personal which emphasises the need for a stronger customer focus, addressing individual needs and aspirations.
To help achieve this, AMI also unveiled a four-point action plan aimed at supporting advisers as the protection market evolves.
Consumer expectations
The AMI report found that one in four (28%) consumers believed it should take no more than 48 hours from applying for protection to having it in place for someone with no complex health conditions, and a further 25% expected it to take less than a week.
Younger consumers tended to have more realistic expectations, with 21% of Gen Z (born between 1997 and 2021) anticipating a 48-hour turnaround compared to 31% of Gen X (born between 1965 and 1980).
On claims, 44% of consumers expected a decision within a week, and 27% anticipated receiving payment in their bank account within that timeframe.
Insurer service
For the first time, AMI also explored advisers’ perspectives on insurer service levels. The results showed mixed views, with no clear consensus on whether service levels have improved or declined over the past one to two years.
But the most diverse experiences were around underwriting.
While 28% of advisers reported a decline in service, 20% saw improvements. For claims handling, 16% observed worsening service levels, while 12% noted better performance.
Improving customer retention
The report also highlighted positive trends in customer retention, with a growing number of advisers actively working to keep protection policies in force.
Currently, 65% of advisers said they were proactively doing something, up from 60% in 2023, with over half (56%) conducting regular policy reviews, and 16% reminding clients of product flexibility and payment deferral options.
Among those taking these steps, 44% had seen improvements in customer retention.
While 33% of consumers recalled receiving an annual statement from their insurer, only 16% said it prompted them to review their coverage.
Despite consumers believing protection should be reviewed every 13.6 months on average, just 45% with protection had done so in the past year, and 17% had never reviewed their protection at all.
Reasons for not reviewing include unchanged personal circumstances (33%), a lack of consideration (25%), and scepticism about the benefits (15%).
Role of the annual statement
While annual statements have proved to be a prompt to encourage some consumers to review their policies, many respondents were seeking just the basic policy information from an annual statement.
Details about how many claims the insurer has paid out sat at the bottom of the list as just 14% stated they wanted it on their annual statement.
The top information requested from annual statements included:
- 57% wanted to know what the policy covers
- 48% wanted to see the premium amount
- 46% wanted to know the policy end date
- 41% sought guidance on how to make a claim
- 40% wanted details on exclusions
- 40% wanted to know about additional benefits.
Furthermore, 44% of consumers felt responsible for prompting a review of their protection, while 28% (rising to 32% among Gen Z) thought insurers should take the lead. Among existing policyholders, 22% expected advisers to prompt reviews.
Younger consumers, particularly Gen Z (27%) and Millennials born between 1981 and 1996 (24%), were more likely to place this responsibility on advisers.
Similarly, 30% of advisers believed insurers should prompt consumers to review their protection needs, though a greater number (42%) disagreed. The majority of advisers (83%) saw it as their role to encourage regular reviews.
AMI four-point action plan
Following the research and an additional community group study with 16 participants, AMI devised the following four action points to help advisers and insurers build more understanding and empathy with clients and potential clients.
This included:
- Build in a human element upfront – take time to understand personal circumstances and situations before explaining products
- Make products easy and accessible – avoid jargon and find ways to make them easy to understand
- Allow clients to feel in control – give them time to think about them, research them and ask additional questions
- Focus on the positives – highlight how the products can provide help in the worst situations, share examples of this and reassure clients that they have real value.
Keeping policies active
Robert Sinclair, CEO of the Association of Mortgage Intermediaries, (pictured) said: “This year’s report underscores the growing role advisers play in keeping protection policies active, with more clients benefitting from regular reviews and tailored advice.
“However, the data also highlights areas where the industry can improve, particularly in meeting consumer expectations around policy issuance and claims processing.
“By addressing these gaps and enhancing communication, we can ensure more consumers are protected when they need it most.
“As we look ahead to the FCA’s upcoming market study on the pure protection market, it’s important to recognise that whilst significant, it’s important not to lose sight of our ongoing mission – to ensure UK consumers receive appropriate protection advice every day.”
Vikki Jefferies, market development director at Legal & General Retail said: “The findings from this year’s report clearly show that while we have made significant strides in engaging with clients and addressing their needs, there is still room for improvement.
“By focusing on transparency, ease of access, and personalised advice, we can better serve our customers and ensure they feel confident and secure in their protection choices.
“Importantly, there’s room for us, as providers, to support advisers when it comes to managing client expectations. It’s a challenging but exciting time for the industry.
“And I believe that by continuing to listen to our clients and adapting to their evolving needs, we can make significant progress.”
Carrie Johnson, protection director at Royal London, said: “It’s important to hear from consumers on how we are doing, and we’re always keen to listen to this feedback and to continue to improve.
“While technology has undoubtedly enabled us to offer more sophisticated and personalised cover, along with a broader range of value-added services, it can also create complexity.
“We need to remember protection products support customers at the most vulnerable times in their lives, so it’s crucial we treat them fairly and quickly when they need us.”
Joanna Streames, owner of Velvet Mortgage and Insure Services, said: “The findings highlight the growing importance of transparency and clarity in annual statements.
“It’s encouraging to see that receiving statement prompt some people to review their cover.
“The disparity in what consumers find most valuable suggests there is still work to be done to ensure statements are tailored to client needs, particularly for younger generations.”