Johnny Timpson's Blog

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Our wider duty as financial protection providers

Financial protection solutions such as life insurance, critical illness insurance and income protection are designed to, and do, provide essential financial assistance should illness or death occur. Our industry and profession rightly takes pride in not only the high percentage of claims paid, but also the ease and speed of claims payment.

However, Scottish Widows, along with other insurers, have become increasingly aware that in times of vulnerability, not necessarily related to an insurance claim, our policyholders and/or their immediate families may have need for support beyond financial matters.

In response to this, financial insurance products increasingly now include physical and mental health helplines, medical second opinions, bereavement counselling, elderly care, grey claims panels, signposting to charities and agencies, plus a range of services that can be provided through experienced and specialist personal nurse advisers. These personal nurse adviser services are becoming more important and valuable given the increasing strain on our NHS, Social Care and Mental Health services.

Scottish Widows Care support service provides support to policyholders and their immediate families from day one, at any time during the policy term. This service, provided in partnership with RedArc, provides long term practical advice and emotional support from a dedicated personal nurse adviser and even covers pre-existing conditions.

Scottish Widows also proactively signpost Cancer claimants to the Macmillan Cancer Support Financial Guidance team. One Scottish Widows customer was referred to Macmillan as they were worried about their finances having been unable to work after diagnosis. Macmillan took the customer through a financial fact find and provided options available to them, including a check on their benefit entitlement and an application for a Macmillan grant towards the cost of travelling to medical appointments. This resulted in the customer receiving an increase of over £4000 annually and a lump sum of £400.

The Financial Conduct Authority has an on-going and increasing concern for firms to do the right thing for vulnerable customers. They published the response to their Consumer Consultation on 17th July, bringing positive news for the vulnerability agenda. This includes retaining its existing definition of a vulnerable customer and committing to a new push on vulnerability, set to be published in 2019.

We can read this as a fairly clear sign of intent from the FCA which should keep up the momentum on the vulnerability agenda. In addition, it will also provide an opportunity for the capture and sharing of vulnerable customer good practice, developed by both providers and advisers since the regulators Vulnerable Customer Occasional Paper three years ago.

Our duty of care goes beyond simply paying claims

As we know, despite the success of the 7Families Project (see, the financial protection profession is continually fighting an uphill battle to engage consumers on their financial resilience and protection needs, as well as raising awareness of and trust in the value of protection insurance.

Tracey Clarke, one of the 7Families members explained that the project helped them realise the benefits they would have enjoyed if they had Income Protection cover in place. She appreciated the regular friendly phone call from her RedArc nurse, giving her on-going reassurance and a route to further medical help. In her words: “the support, the people, were in many ways, more important than the money”.

As interest rates rise we will have to work harder to alleviate affordability objections from customers. In a market where individuals are not queueing up to buy financial protection for reasons such as lack of awareness, mistaken belief that the state will provide, or mistrust, then the more providers can do to “humanise” the products, in my view, the better.

Find out how Scottish Widows Care support service can benefit your clients at times of vulnerability.

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