So as it turns out, I have had more than a little experience of renewals and replacement over the last few months; but that serves me right for buying a house which, it now turns out, is falling down. Oh if only I could post some pictures of the surprises that I have seen!

One of my favourites was the ‘skirting board mounted’ socket, which seemed to have an unknown source of power… that was, until we had the carpet fitters in and I found that there was a plug that traversed the dining room, under the floor and previously was plugged in, in the lounge! Needless to say, that was a case of replacement and not renewal.

Anyway; to more conventional matters of renewal and replacement.

I have had a great deal of feedback from our GI specialists stating that our renewal and replacement process is not fit for purpose; so, we reviewed the process and have made some improvements. But, before I come to the policy change we have put in place, I want to take a moment to remind everyone of a couple of things:

What is replacement?

This is where you advise a customer to put in place a new policy as a replacement for the policy that is currently in force. This can be a policy that is on risk or, has expired or been cancelled in the last 3 months. This is an advisory process.

What is renewal?

This is what happens if you or the customer does nothing. The annually renewable policy (in most cases) will continue to remain in force unless cancelled by the customer. Think in terms of your car insurance – If you, as the customer don’t shop around, the cover will continue, albeit on revised terms offered by the insurer. You wouldn’t be left without cover.

Compliance update January 2017 – General Insurance Changes

“If you as an adviser are in anyway involved in the renewal process, it is you who carries the responsibility to ensure that the regulatory responsibilities as recorded in ICOBS are met. However, where the renewal takes place at the hands of the insurer without any input from you, it is they who carry the responsibility for satisfying the regulatory requirements regarding renewal.”

So what is it that advisers are expected to do?

  1. You must disclose last year’s premium at renewal;
  2. You must include text that encourages consumers to check their cover and shop around for the best deal at each renewal (In a ‘durable medium’ communication);
  3. You must identify consumers who have renewed with the provider four times and encourage them, through an additional ‘durable medium’ communication, to shop around.

I mention the above points because they have a direct bearing on the revised policy that we are putting in place.

Policy

We have agreed a revised process to make your life a little easier come renewal time on a GI policy.

The process flow chart can be found here. But, here is an overview:

  1. Policy initially sold
  2. 10 months later, you, as the adviser attempt to contact customer to offer review of their protection needs (this must be in a durable medium and should be uploaded to the client file on The Key)
  3. A follow up phone call is made to establish if the customer received your previous email/letter and if they would welcome a review.
  4. The customer either:
    1. Agrees to proceed with a review
    2. Does not agree
    3. Cannot be contacted
  5. If they agree to a review, then a normal advice file is necessary
  6. If they do not agree, you must send them an email or letter to say that you have not reviewed either their cover or needs and the associated implications
  7. If they cannot be contacted, you will need to send another chase email (or letter) to say that if you do not hear back, the policy will continue as it was originally set up and to contact the adviser to discuss further
  8. Where business was written under another network and the policy is set to renew without a review, we will need a skeleton file to pay renewal commission (simply put, this is a client record on The Key, plus evidence that the above process has been followed)

We feel that this process is closely aligned to the Regulator’s own stance on “Customer Engagement” and allows you to continue to service those clients who wish to be supported, but does not create unnecessary work should the client be unresponsive or uninterested.

Additionally, this process of contact should help you to ‘ring fence’ your customers through providing excellent service.

By the way, if anyone is thinking about replacing their house, my advice is… only do so, if you have plenty of time and deep pockets!