Claims always come first with DMS, Claims always had top priority
The only part of an insurance policy of any real interest to a Client is the “Claims Service”. This is why the Client pays their premium. To a Client, a good claims service is one that says “yes” to a claim. A rubbish claim service is one which says “no”, even if the refusal of the claim is because the Client is trying to claim for a risk that is not covered under the policy. The problem is made worse by the fact that compliance now requires us to send so much documentation to the Client that they do not read all of it, and the Client will blame the Adviser and the Administrator for any claim refusal, just as much as they blame the insurer.
THE DECISION & THE IMPLEMENTATION OF IT
We have always made our claims service the very heart of our business. When a Client notifies a claim, the claim form is emailed to them within a couple of hours, or posted out that night, whichever they request. We drop all other tasks to give this top priority, and our claims managers Advent Group, action every document received from the Client within 24 hours. But this was not enough. So we analysed our previous claims to determine the reasons why claims were being turned down, and then worked out what action we could take to overcome the problem. Analysis of refused claims showed the following major reasons for refusals (in bold), and then, underneath, the action taken to overcome them.
Problem: Clients in fixed term contracts, where their Employment Status is disclosed as Employed or running their own business with no mention of a short-term contract, thereby suggesting permanent employment.
Solution: Two extra questions on the online application now ensure that we are aware of this situation when we underwrite the application. We will no longer offer Unemployment cover until the current timeframe on the contract allows us to treat a Client as being in Permanent Employment. The allocation of new Employment Status descriptions now makes this very clear: a Client employed on a short term contract and not yet capable of being treated as if in Permanent Employment will be described as “Employed – On Contract”, and will be eligible for Accident & Sickness Benefit only. DMS will diarise a follow up letter to be sent as soon as we can treat them as if they were in Permanent Employment when this will change to “Employed – Established Contractor” and the addition of In-voluntary Redundancy cover will be offered. Previous employment with their contracted customer will be aggregated with their time on contract before the 24 month rule is applied, so long as there was no gap between their employment and their contract.
Problem: Failure to achieve performance targets during probationary periods
Solution: Where a Client is within an Unemployment claim when offered a new job with a Probationary Period, we will encourage them to take the new job by treating this as a temporary job and suspending their claim with the clock stopped. If they then fail the Probationary Period, their claim can be restarted, with no further waiting period.
Problem: Client opted for Voluntary Redundancy
Solution: Their Short Term Income Protection Certificate will make it absolutely clear that only Involuntary Redundancy is covered.
Problem: Clients running their own business (either Self-Employed or Controlling Director) where at time of claim they were unable to prove the level of gross income or net profit stated on their application. A new policy offering cover against Business Closure needed to be designed for these Clients, rather than taking a policy designed to give cover for employed people against Involuntary Redundancy.
Solution: On application, Clients must Self-Certify their income by Pre-Validating their monthly outlay, so no further enquiries on either income or outlay need be made at claim stage. Monthly Benefit is restricted to 125% of the sum of their regular provable monthly outlay, and for the first two years trading cover is restricted to Accident & Sickness. We will diarise a reminder to offer them the addition of Business Closure cover as soon as they have been trading for two years.
Problem: Circumstances have changed so much that Clients are unable to show the necessary Income or expenditure.
Solution: Every policy is reviewed annually on the anniversary of its start date. 60 days prior to this we write to Clients confirming the terms of the cover we are able to offer them for the next year. Clients are given copies of the details we hold on them and are reminded to inform us if any of them have changed. If they have not already pre-validated their income for all future claims, we offer them another opportunity to do so.
Problem: Failure to disclose Pre-Existing Conditions, or a claim arises as a result of a Pre-Existing Condition
Solution: Where Pre-Existing Conditions are disclosed, an Exclusion is specifically made on the Certificate. A reminder of the necessity of full disclosure of Pre-existing Conditions is included in future Review Letters. Pre-Existing Conditions will cease to invalidate claims after 24 months on non-recurrence and no further medical advice or treatment.
Problem: Clients who are still within the Initial Exclusion Period when they try to make an Unemployment claim.
Solution: Short Term Income Protection Certificates now show the Initial Exclusion Period start date, its term, and its end date. If a Client becomes unemployed during the Initial Exclusion Period because of Involuntary Redundancy or Business Closure, we will cancel the cover with a full refund of all premiums paid, activate our “Fresh Start Back into Work Service” until your Client is back in work, and for employed Clients we will provide our “DMS Free Employment Lawyer for You” cover for a further full 12 months.
Problem: Clients claiming for back related conditions or stress and anxiety where their GP has not referred them to a Specialist Consultant.
Solution: Our policy now allows us to pay claims of these types for up to 3 months before referral to a specialist consultant is required.
Problem: Clients who have two jobs, or are also Directors or Shareholders in other businesses.
Solution: The answers to extra questions on our online application now ensure that we are aware of this when we underwrite the application. Clients in these situations will not be offered Involuntary Redundancy or Business Closure cover where payment of a claim might be uncertain.
We decided that in preparation for any future Claim, Pre-Validation of future claims would start as soon as we receive the Client’s application form.
Yes, our application form may now ask more questions than other insurer and yes, we may well contact you requesting further information… but every question asked now is potentially several questions that won’t need to be asked later, if a claim arises, when questions about the application raised at claim stage are very often perceived by the Client to be the insurer seeking to avoid paying the claim.
Unlike many other insurers, we actually individually underwrite every application we receive. We do not leave this until you wish to make a claim – maybe years later. This means that a DMS Certificate of Insurance tells you exactly what is covered, and what is not. With DMS you know you are insured. Where applications are not underwritten as is the case with almost every other provider, you hope you are covered, but you will only know for certain if you try to make a claim, and then it will be too late.
DMS Short Term Income Replacement (STIR) was a complete re-design of our policies, and is now offered in two versions.
- STIR Plus offers your Client the highest quality cover available in the market today.
- STIR Value offers sound basic cover at a much reduced cost.
Policy documentation was simplified and Client Servicing made more accessible by:
- Encouraging Clients to raise issues with their Financial Adviser if there is anything in the documentation they do not understand.
- Reminding Clients that our Telephone Helpline on 0800 302 9203 is open from 9.00 am to 8.00 pm on weekdays and 9.00 am to 4.00 pm at weekends. Calls are answered by our PA’s, and information or requests for action are emailed to DMS for us to send replies by email or by post.
- For Clients with online access our Online Customer Help Centre is always available at www.dmsadmin.co.uk
- Our Adviser Telephone Helpline on 0800 817 4725 is also open from 9.00 am to 8.00 pm on weekdays and 9.00 am to 4.00 pm at weekends.
Underwriting of applications was improved, with particular emphasis being placed on the design of questions in the online application, and our offer of Pre-Validation for claims purposes of Allowed Expenses, and for Clients running their own business mandatory Self-Certification of income or profit by Pre-Validation of monthly outlay.
- Employed Clients are not compelled to Pre-Validate monthly outlay, we offer the facility, and the choice is theirs. We do however encourage Clients to do this as it reduces stress during a claim, and Financial Advisers are asked to do this as well. Three months after policy issue, and annually thereafter, DMS writes to Clients inviting them to take up this option.
- Clients who are running their own business must Self-Certify their income or profit by Pre-Validating their Allowed Expenses at application stage, so that no further enquiries need be made on either of these if a claim arises in the future.
- We constantly stress that everything we do is by way of preparation for future claims.
Remember If the Client answers all the questions on our application form truthfully, then so long as they tell the truth on their claim form, their premium payments are up to date, and they are claiming for something that is covered under their policy, their claim will be paid.