| Link(s): | FCA calls for firms to improve bereavement handling times and shares best practice | FCA Findings of our multi-firm review of life insurers’ bereavement claim process | FCA |
Context
As outlined in its Life insurance portfolio letter: insurance market priorities 2023-2025 from September 2023, the FCA has carried out work to understand how life insurers’ service delivery compares with their intended standards in relation specifically to bereavement claims, and how it compares across firms. The FCA selected bereavement claims as an area for scrutiny because this is a point when customers may have a higher chance of demonstrating characteristics of vulnerability. Life Insurers paid out over 250,000 claims in connection with group and individual protection policies in 2022. The report sets out the findings from the review of bereavement claim processes for life products from a sample of 15 life insurers (representing over 75% of the life protection market).
Key points to note and next actions
- The FCA asked firms to set out their customer journeys for each life product within the four product categories (Term Insurance, Group Life Cover, Guaranteed Over-50 Plans and Whole of Life Insurance), asked firms what they were aiming for in terms of customer service and how long helping each customer actually took on average, and asked for information to assess how firms were delivering, measuring and monitoring customer service.
- The review found evidence of good practice, such as firms providing additional support for claimants throughout what is a difficult time for them. The FCA also recognises firms can face challenges in providing a timely service, such as obtaining the evidence needed to assess a claim.
- The FCA has found that some firms still have further to go to meet its expectations, particularly in the measurement, monitoring, and delivery of good service outcomes for customers.
- The FCA found that firms took on average between 53 and 122 days to process a claim, from start to finish, for a term insurance policy, within 36 days for group life cover, 20 days for Over 50 plans, and 53 days for whole of life (although measurement is inconsistent as few firms captured these figures).
- Most of the firms were not able to provide clear and comprehensive servicing standards and thresholds that monitored the process for bereavement claims in each of the four product categories.
- The FCA has set out its expectations in relation to end-to-end journey times for each product type, service level agreements, support service for claimants, making step-change improvements to customer outcomes, and service performance.
- The report sets out some examples of good practice in relation to service support, requesting documentation, end-to-end journey times, and the challenges involved in resourcing.