Legal services as an added benefit to policy covers to enhance customer propositions


Insurance is a means of protection from financial losses.  In a nutshell, insurance works by distributing risks and pooling funds from many insured entities or persons to pay for the losses incurred by some.

Over the years, products and services of financial institutions are being commoditized.  In their effort to become more cost efficient, banks have transformed how customers interact with them through self-service transactions such as ATM and online banking.  Customers are often seen as 12-digit account numbers or statistics.   Insurance companies are in the same predicament.  When shopping for a non-life insurance coverage, one can’t help but to notice most insurers today offer mostly the same product at the same premium with nary distinguishing feature in sight.

According to a survey report “Understanding Financial Consumers in the Digital Era 2014” by CGI Group, consumers wanted their financial service providers to be a more relevant part of their lives.  81% of the consumer wanted their service providers to “reward me for my business”, some 58% of them said they wanted service providers to “see me as a person”, whilst 50% asked their service providers to “give me access to independent experts when I need them”.  For insurance policyholders, it means that they see their policy more than just a possible pay out and in most instances, they see their insurance as a cost when there is never a claim made.  “I have just wasted all my premiums all these years as I never made any claims.”  While consumers want insurance to be simple but at the same time are increasingly looking for value-based customer experience from their service providers.

With the phased liberalization of non-life tariffs by Bank Negara Malaysia as the backdrop for the insurance sector to innovate, it is increasingly essential for Malaysian insurers who want to succeed to consider having useful additional benefits attached to their policy covers to drive greater customer retention, perceived value and at the same time leveraging product innovation as a source of competitive differentiation.  Offering access to easy-to-use, high-quality, efficient, compliant and affordable frequently used legal services as added benefits to policy covers is a customer proposition that will be seen by policyholders as value enhancement to the policies they have bought.  Dave Jones of Epoq UK explains why added value benefits on protection policies matter*.

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* How valuable are added benefits on protection policies? by Epoq