Last year, Mr X had an accident at work and was forced to give up his job as a panel beater. The future did not look good. He did not have the skills to switch to another career. And simply resting at home was sapping his self confidence which meant his long term prospects were bleak.
If Mr X had been on state benefits, it is likely he would still be at home, watching daytime TV, and having little contact with the outside world.
But, because Mr X was a Zurich Life individual income protection policyholder, the future now looks bright. Money worries were relieved as his income was paid by the insurer, but, equally importantly, he benefited from the expert advice of a vocational training agency. Now he is about to start work as a trainer in panel beating at a local adult education college.
It is a job which will bring him into contact with people and, above all, is something which gives his life real meaning again.
While Mr X’s name remains confidential, it is a real life story related by Annie Dorrington of Zurich Life’s marketing department. The company prides itself on its innovative and caring approach to claims and is now one of the leading providers of individual income protection sold through IFAs.
As managing director Brian Ridsdale comments, the individual income protection market remains static on the whole, but Zurich Life has grown its market share by some 20%.
The company believes the relatively slow growth individual income protection market is partly down to a lack of understanding of the product, and that it is also up to IFAs to get the message across.
Success for Zurich Life in this segment of the market has come as part of a deliberate strategy of working with IFAs. Two years ago, the company introduced its Fast Track underwriting system, which means IFA clients can be put on cover within a day. As marketing manager Clare Goodfellow comments: “A quick decision can make all the difference to a sale.”
A reorganisation at the insurer now means a dedicated business team now handles all IFA calls, and, wherever possible, the same member of staff will work with intermediaries on an individual basis. The 14-strong team, called IFA Direct, deals with some 450 intermediaries. Account executive Sharon Furtado comments that while there are staff on the road staff to meet IFAs, many prefer to deal by phone.
This reorganisation was partly helped by a move to an impressive out-of-town business park site based at Whiteley, outside Portsmouth. The company was formerly based in the city centre, but outgrew its offices. Its new headquarters now allow plenty of space for staff and room to expand.
And its eyes are on the income protection market. It is already a successful performer in the critical illness market, but believes income protection is equally, if not more, valid, particularly for the self employed.
Clare Goodfellow comments: “You tend to hear less about someone who is off work than has a critical illness, but the amount paid out for an income protection claim can be more.”
Typically, benefits can continue up to retirement age.
As part of the emphasis Zurich Life places on making sure the customer understands its product, the policy is called income security insurance, underlining that it is to protect the policyholder’s income rather than their health.
Annie Dorrington adds that IFAs should also take advantage of Zurich Life’s Quote Z software system which is a highly successful but simple to operate selling tool. By keying in a few key facts about the potential client, the intermediary is able to provide an immediate quote and graphical picture of protection needs. The system has recently been improved and updated by the company’s in-house electronic trading analyst, Andrew Simon.
Using the software on a laptop, for example, an intermediary can present face to face effectively, giving a clear indication of state benefits if cover is not taken out and showing a choice of options such as different waiting periods, which can range from a month to a year. Dorrington adds that IFAs also benefit because Zurich Life produces all its product literature in plain English. The company says it has a flexible approach to underwriting, although some occupations, such as deep sea diving, are excluded. It does, however, cover a number of higher risk jobs including bar work and some construction. It is also particularly strong in the medical profession.
One area in which the company believes it stands out is claims management. In recent times, some insurers have started following a managed care system favoured by US insurers. This involves the insurer taking an active role in the claimant’s treatment such as recommending and paying for private medical treatment, with the aim of cutting claims costs as well as helping the insured return to work as soon as possible.
But Zurich Life had been taking this type of approach before it became commonplace. Claims controller Chris Ford comments that a year after being off work, the claimant is likely to become so de-motivated and lacking in confidence they have only a 20% chance of returning to work.
He adds that Zurich Life believes in fair play when it comes to claims. Policyholders who need to claim are assisted by an agency which helps with filling in the claim form. This benefits those who are unhappy with form-filling and also makes sure the insurer gets the right information it needs.
His colleague Penny Wood explains that Zurich Life likes to know about potential problems early. It is then able to recommend a vocational training agency such as the one who helped the former panel beater or private medical consultations to speed up treatment. This might be at a back rehabilitation or sports injury clinic, for example.
Wood adds that while back injuries were previously the major source of claims for the insurer, stress has overtaken them. Woods says this can affect many professionals, with teachers being particularly prone to mental pressures and likely to benefit from seeing a psychologist. Again early intervention is seen as key, to make sure the claimant is not left isolated and help the insurer avoid needless costs.
Zurich Life is currently a top 10 provider of individual income protection insurance and has confidence in the market and its IFAs. It has big plans to expand, and sees no reason why its IFA partners should not share in its success.