Issue a ‘major concern’ for next year
It is “nonsensical” for the protection industry to rely on property addresses alone as a means of contacting customers, the Financial Ombudsman Service (FOS) has warned, amid concerns that policy lapses will prove to be a major issue for the industry next year.
Speaking at the Protection Review conference in London yesterday, Melissa Collett, an Ombudsman at FOS, said that policy lapses are a significant trigger for complaints to FOS.
She said it is “simple” nowadays for firms to have up to date contact information for their customers such as email addresses so that they do not need to rely on historical addresses as a means of contacting consumers several years down the line.
Industry figures at the conference also debated the need to communicate with customers regularly in order to avoid policies lapsing.
But Warren Copp, chief underwriter at Pacific Life Re, said one of the reasons the industry has not been successful at managing customers over the longer term in the past is that spikes of policy lapses are seen at points of contact.
He said this is because customers are reminded that they are spending money on a product and may therefore be prompted to cancel.
He told delegates: “That said, is that a reason why we should not contact customers? Clearly not. I think it shows we are not doing it very well and that we need to do it better.”
Policy lapses were also highlighted as a major concern facing the industry next year by several of the conference’s speakers.
Martyn Saville, principal researcher at Which?, said that the economic climate means that the cancellation of protection policies is going to be the biggest issue for the industry going forward.
While Emma Walker, channel manager for protection at MoneySupermarket.com, told delegates: “I think that any business that does not have a robust retention in place is going to be hit hard by cancellations and people cutting back on purchases next year.”