Advice firms would like to see insurers integrate with their practice management and cash flow planning tools to enable them to better support their clients taking out insurance cover, the Financial Technology Research Centre (FTRC) said.
According to a study published by the research consultancy, the three leading areas of friction between insurers and advisers were managing in-force policies; a lack of consistency across insurers; and the need to be kept informed by insurers at all times.
The study, which sought to explore at which point distributors interact with insurers, key functions that cause the most problems and operational changes advisers would like to see, found that many insurers often fail to provide sufficient in-force policy information or functionality to make changes within the operating systems advisers use.
Advisers also cited a lack of consistency and consensus from insurers as creating confusion, particularly where signatures are concerned. While some insurers do not require a signature on trust forms, others accept an electronic signature or insist on a wet signature, leaving advisers uncertain about what is legally acceptable, FTRC said.
Insurance providers were also found to fall short when it comes to regular communication, particularly around claims processing.
Furthermore, the findings highlighted a greater need for life insurers to do more to support advisers who are not protection specialists, such as financial planners, to engage with their clients.
Ian McKenna, director, FTRC, deemed the findings a “call to action” for insurers.
He said: “This study confirms that whilst the industry has moved forwards in many areas, there is still much that can be improved to help advisers provide as good an experience for consumers as possible. Of particular note is that all advisers want insurers to be more proactive in keeping them informed across all processes. It is currently felt that the information they are provided with via tracking services and extranets is not sufficient, if available at all, and often advisers can be left embarrassed as they are not aware of key information when speaking to their clients.
“If insurers don’t start communicating with the systems that advisers use at the heart of their businesses this will considerably constrain the ability to address the protection gap.”
Jon Dear, chief operating officer – protection division, AFH Wealth Management, added: “The protection industry does a lot of things well, however as this report highlights there are a number of areas where their processes and systems could be improved to better support adviser firms of all shapes and sizes.
“We receive a lot data electronically from investment providers, however this is not replicated from protection providers on in-force policies, and as a result protection is far less visible for both advisers and their clients.”