Insurers have conceded that service levels have not been where they would have liked over the last year and admitted the industry was caught out by the scale of the surge in demand.
Leaders from Aviva, Bupa, Vitality and WPA were quizzed as part of the insurer leaders’ panel to close out the first day of Health & Protection‘s second annual Health Summit.
Responding to a question of whether insurers had been “caught with their pants down” due to a surge in demand for PMI over recent years, they acknowledged they had been.
On the back foot
Iain McMillan, director of distribution at Bupa UK Insurance, (pictured far left) explained that when claims demand returned it came far later than expected and it was getting to the stage where the firm thought it was not coming back.
“And then suddenly in January 2023 at the end of the month somebody said, bloody hell what’s happened to the claims this month?” McMillan told delegates.
“And then of course you’re on the back foot in terms of pricing, which we have seen the correction now and also on the back foot in terms of resources and capability to handle the enquiries that are coming in.”
According to McMillan the firm endured “a torrid three or four months” across claims.
“Actually we had already started recruiting at the back end of the year before,” he continued.
“We couldn’t get people in the door quick enough, trained up and available to put them on phones.
“So it was an absolutely terrible time for customers, for people we did have on the frontline and for me personally getting calls from advisers on a regular basis about the service we were delivering to our customers.
“I think we’ve got better. I’m sure everyone else has got better as well, but as far as I’m concerned we did get caught with our pants down.”
Not given the service we would have liked
Steve Bridger, managing director of Aviva UK Health, (pictured far right) admitted the market had been caught “off guard”.
“What happened in this market through Covid and that speed of recovery, the lack of ability to forecast that with precision was really hard for everyone,” Bridger told delegates.
“If it was just the growth we’ve seen in lives in the market, my belief is this market would have handled that.”
Bridger said that the insurer had been able to handle issues from a number of lives perspective but added: “It’s that utility and customer behaviour bit that’s on top of it and frequency that’s been the challenge despite moving claims in the last year from 20% to 43% digital, 34% increase in FTE and people and the lag of bringing them in and those points.
“We have not responded slowly,” he continued. “The ability to look ahead on that was really difficult – almost and I’m sticking neck out – impossible to get to exactly that shape we’ve seen.
“But our response to it has been very focused but all of us at some stage, maybe not everyone, have not given the service we would have liked for customers if that had been any customer or us, or a family member or friend, it would not have been good enough.”
At the end of July, Health & Protection exclusively revealed Aviva was reviewing its growth plans for 2023 and 2024 and had apologised to private medical insurance (PMI) customers as it continued to tackle the issue of long waiting times for its call centres.
Perfect storm
Meanwhile Dr Keith Klintworth, managing director of VitalityHealth, (pictured centre left) described the situation as a “perfect storm”
“I think our own experience was where did everybody go? Where did the workers go?” Klintworth continued.
“There weren’t here. Unemployment rates have been the lowest levels they have ever been in the UK. Brexit had a big part to play in that.
“And were we caught with our pants down? Well we were caught not predicting this was going to be at that level.”
Quite fortunate
Brian Goodman, executive director, corporate at WPA, (pictured centre right) revealed that it was during Q4 2022 when the provider started seeing claims increase.
“Of course we were already pricing in advance for 2023 renewals, but I suspect if we’d come to advisers and said, we predict we’re going to see a 20% increase in utilisation, we’d like to put all the claims funds up for all customers, you’d probably have said ‘no, we have to wait and see’.
“We’ve seen some big increases come through now for January this year. I’m going to stick my flag up and say at WPA we were quite fortunate.
“Perhaps it’s a size thing but we were able to recruit and we were able during last year to average out I think 86 seconds on the call waiting for the whole year so we’ve been quite fortunate in that regard.
“But others who are struggling, it doesn’t help the industry as a whole.”