Protection service review suggests interesting opportunities for advisers

To conduct this survey, we asked advisers not only which aspects of service they value the most, but also which individual protection products they recommended in the past 12 months. In addition to rating the importance of each service category, advisers were also asked to rate their own experience with protection providers to identify gaps in satisfaction experience. This combination of questions gives an interesting insight into the current protection market from the adviser point of view.

Protection market trends

In terms of the individual protection products used by financial advisers, the sector continues to be dominated by level term assurance, critical illness with life cover and decreasing term assurance.

As a new addition to the survey this year, we asked advisers what interest, if any, they have in pre-paid funeral plans. Of those asked, only 9% of advisers said they recommend pre-paid funeral plans.  An industry consultation initiated in June 2018 will, most likely, result in this market coming under FCA supervision. Consequently, this product may garner more appeal to financial advisers in future.

Products receiving more support from advisers are mortgage payment protection insurance and decreasing term assurance, with a three and two percentage point increase respectively. This may suggest a renewed interest in mortgage-related sales among advisers.

It is interesting to note that support among advisers for Guaranteed Acceptance Plans increased whereas there was a marked decrease of six percentage points in support for underwritten whole of life.

Satisfaction with providers drops

Overall for 2018, satisfaction levels are generally lower than in 2017. Advisers ranked ‘claims handling and administration’ as the most important aspect of service, yet the weighted satisfaction is only 57%.  It is however the only category that improved from 2017.

Interestingly, the two other most important categories, ‘underwriting services and ‘new business processing’ show higher weighted satisfaction, 80% and 72% respectively.

Worst hit were underwriting services, down six percentage points, and technical assistance, down eight percentage points. This may be due to continuing moves by insurers to deliver intermediary protection business via technology platforms. While overall this is a good thing, it may also give rise to dissatisfaction among advisers where there are initial teething problems.

“The study sets out to measure how satisfied advisers are with their preferred providers and identified where expectations were being met by cross-matching ranked importance to ranked satisfaction. Conversely, underwriting services and claims handling and administration are ranked in the top three for importance, but the performance is below par. The message for the protection sector is that more attention needs to be given to these areas to improve satisfaction,” David Cartwright, Head of Insight and Consulting for Wealth and Protection at Defaqto, comments.

Interested in learning more?

You can download our free Protection service review with more details, including how individual providers rank, here.

We use the results of the survey to rate providers Gold, Silver or Bronze based on their overall satisfaction score. These Service Ratings help advisers in choosing the appropriate provider partners for them as they are fully based on the feedback we receive. They are available to view and use within Defaqto Engage, our end-to-end financial planning solution.

You can learn more about Engage Core, our end-to-end financial planning tool, and request a demonstration, here.

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