1. Complaints – learning from past mistakes Melissa Collett Consultant
Protect association meeting
29 September 2016

2. complaints 

3. Agenda Understanding your complaints Common causes of complaints
The cost of complaints
Steps to take to make your life easier

5. What the complaints were about
9 % of total FOS complaints in 2016 were about insurance (non-PPI)
31,284 out of 340,899
- complaints about claims – 56%
- complaints about sales and advice – 24%
- complaints about administration – 20%
Of the 9% of insurance complaints in 2016, 8.5% were about protection and PMI

6. Causes of complaints
Communication – how the policy terms and conditions were explained
Coverage – strict interpretations can cause significant distress
Customer service – making claim process stressful
Problems with third parties and intermediaries
Misrepresentation – due to lack of clear questions
Delays – with no explanation
Terminology – not understanding the product, policy terms or process

7. Learning from past mistakes
Complaints = Feedback
Think about the customer experience– were you proud of it? If not, why?
How can I turn this complaint into a positive experience for the customer?
Is monetary compensation appropriate? What about an apology?
How have you taken on board the customer’s feedback?
What steps are you taking to prevent complaints re-occurring?

8. Case study
A customer complained that she was mis-sold a life and critical illness policy alongside a mortgage. She didn’t need the cover because her company provided death in service benefit, and in any event, she was told the insurance was compulsory.
The complaints handler looked at the complaint and immediately phoned the customer. She talked through with customer why she felt the policy was of no use to her. She listened carefully and promised to send the customer the sales documentation showing that the policy was not compulsory, which she did later that day. She also asked the customer for copies of her death in service benefits and said she would review it for her. She phoned the customer back the next day upon receipt of the documents and explained why the death in service benefit would not adequately cover her mortgage. Nevertheless, she asked the customer if she still wanted to cancel the cover.
The customer said she was satisfied with the explanation and she wanted the cover to continue.
The complaints handler informed the sales team that the documentation had been a little confusing to the customer and made suggestions for improvement.

9. Success factors
Prompt
Knowledgeable
Fair
Listening to feedback

10. When things go wrong Continue to engage with the customer
Do your homework – anticipate what is FOS likely to do?
Can you avoid a change in outcome by anticipating FOS’s response?
Can you settle early to avoid a hefty interest fee?
Are there more complaints waiting in the wings?

11. Cost of complaints Referral to FOS (incurring £550 case fee per case)
Unplanned claims payments costing £1000s
Distress and inconvenience payments (tariff higher: £500 now classed as ‘moderate’)
Interest on awards (normally 8% from date of claim, not decision)
Loss of business/customer (eg loss of ongoing premium)
Damage to reputation/complaints record
Wasted management time
Adverse precedents being set for other cases

12. Impact of changes at FOS
Fundamental structural change at FOS over :
Transfer of work to generalist teams
Increased use of telephone
More informal resolutions
Reduction in staffing levels
Focus away from technical expertise
Shifting communication and engagement strategy
How are you going to adapt to the new process and working style at FOS?
How are you going to train your team about new approaches?
How will you keep on top of ongoing changes at FOS?

13. Making life easier Obtain expert advice on live complaints
Make persuasive submissions to FOS on high value/complex complaints
Analyse current live complaints pipeline and identify costs savings
Training, seminars and advice surgeries for claim/complaints teams
Update on latest legal/regulatory/FOS changes and developments
Conduct audits on past complaints
Review each stage of the ‘customer journey’ for fairness

14. Example case study
A market-leading insurance company was experiencing high overturn rates at FOS, which was reported in the press, following FOS publication of complaints data. FOS was directing the insurer to pay claims it had not anticipated, adding substantial interest and distress & inconvenience on top. The insurer’s board decided it wanted to reduce the overturn rates as a priority over the next six months.
Action:
The insurer’s current complaints pipeline was reviewed and cases likely to be upheld were discussed with FOS via conference call. Oral and written submissions were made to bolster the insurer’s arguments on the cases that were borderline. Cases where the insurer agreed with the proposed award were settled early, thus avoiding further hefty interest payments. Monthly conference calls were arranged for continuous discussion of the current workload. Claims staff were retrained on current FOS approaches. Outcome: Within 6 months the overturn rate was reduced by nearly 50%, resulting in positive press coverage, and a significant cost savings.

15. Conclusion
freeimages.co.uk

16. About me
I am an independent consultant who specialises in complaints. I can save your business time and money by helping you handle your complaints more effectively. I can also prevent complaints arising in the first place by end-to-end review of the entire customer journey. I have unparalleled experience in resolving insurance complaints, having spent 11 years in senior positions at the Financial Ombudsman Service. During that time, I made over 1,500 legally-binding decisions across the whole range of regulated insurance products. In addition, I was responsible for developing the ombudsman’s approach to insurance and wrote much of its published guidance. I am passionate about raising standards in the industry, and I regularly share my insight by writing articles and speaking at conferences and events.
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