This comes as AMI launched its fifth Protection Viewpoint Report, Making Protection Personal, in partnership with Royal London and Legal and General (L&G).
The report found that 28% of consumers believe it should take no more than 48 hours from applying for protection for it to take effect when it comes to someone with no complex health conditions. A quarter said this should happen in less than a week.
AMI found that younger consumers had more “realistic expectations”, with 21% of Gen Z respondents suggesting 48-hour time frames compared to 31% of Gen X.
When it came to claiming on insurance, 44% of respondents felt a decision should be made within a week, while 27% expected payment in their bank account within that time period.
AMI’s report also assessed the expectations advisers had regarding insurer service levels for the first time.
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The association said there were “mixed views” and “no clear consensus on whether service levels have improved or declined over the past one to two years”.
The most varied responses were related to underwriting, with 28% of advisers reporting a decline in service and a fifth saying things had improved. As for claims handling, 16% said service levels had worsened and 12% said things had got better.
Better client retention
The report found client retention had improved, with more advisers working to keep protection policies in place.
Some 65% of advisers said they were being proactive in this, up from 60% last year.
Further, 56% of advisers said they held regular policy reviews, while 16% reminded clients of product flexibility and payment deferral options. Among those taking these steps, 44% have seen improvements in customer retention.
A third of consumers said they had received an annual statement from their insurer, which prompted only 16% to review their policies.
On average, consumers said protection should be reviewed every 13.6 months, but only 45% had done this in the last year and 17% had not reviewed their policies at all.
A third of consumers said they had not reviewed their policies because their personal circumstances had not changed, while a quarter said there was a lack of consideration. Some 15% were unsure of the benefits of their policies.
Advisers prompting protection reviews
Most consumers said they used annual statements to simply remind themselves of the basic policy information.
Only 14% wanted to know how many claims an insurer had paid out, while the majority – 57% – wanted to see what the policy covered.
Some 48% wanted to see the premium amount, 46% wanted the policy end date to be on a statement, and 41% wanted guidance on how to make a claim.
Two-fifths of respondents wanted the statement to have details on exclusions, the same proportion as those who wanted to know about additional benefits.
Some 44% of respondents said it was their responsibility to prompt a review of their protection, while 28% said this should be led by insurers. A further 22% said advisers should prompt reviews.
Some 30% of advisers said insurers should encourage consumers to review their policies, but 42% felt this was not the responsibility of firms. The majority – 83% – felt advisers should prompt consumers to review their policies regularly.
The role of advisers
Robert Sinclair, chief executive of AMI, 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. This year’s report, Making Protection Personal, offers both valuable insights and a four-point action plan designed to help advisers better meet customers’ evolving needs.”
Vikki Jefferies, market development director at L&G 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.”
The new AMI Four-point Action Plan
Following this research and an additional community group study with 16 participants, AMI put together four action points to help advisers and insurers.
- 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.
