Poll Result – Outsourcing Claims Services

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The vexed question of whether advisers would be open the future possibility of outsourcing their client’s life insurance claims process to an external specialist firm met with a somewhat mixed result in our latest poll.

At the time of going to press just over half of poll respondents (52%) said that they would not be open to the possibility of outsourcing their clients’ claims processes to a specialist firm while another 40% agreed they would consider doing so.

A sizeable 8% were not sure.

This latest poll arose from an emerging trend across the Ditch which highlighted some advice firms outsourcing some or all of their clients’ life insurance claims to an external specialist.

As we noted last week, in the Australian market these external specialists are ‘of the life insurance industry’ and work closely with advisers and their dealer groups, as opposed to non-industry mainstream legal firms.

These industry-based outsourcing offers seem to be experiencing growing engagement from advice businesses in Australia seeking to hand over some or all of their clients’ claims for three key factors:

• The ever-growing complexity associated with submitting a claim and achieving a successful outcome for the client, especially given the sometimes lack of expertise possessed by non-risk specialist advisers and generalist/holistic practices
• The prolonged delays associated with many claim submissions and the associated time, resources and effort required of the adviser and support team members
• Mitigating any potential action brought by non-sector legal firms engaged by the client, where the advice business or dealer group may be subject to litigation over the role it played in a declined claim outcome

Some of these factors already exist in the Kiwi market, but not to the same extent as that experienced in Australia, especially around the potential litigation issue.

Our poll remains open for another week and we welcome your feedback…