Great schemes need great understanding - work with your target audience

As with all good products, making sure it’s right for your audience is the single most important thing you can do. Fundamentally, this comes down to understanding what it is that a given cohort of schemes' customers need.

Schemes brokers have delegated authority to shape the underwriting needs, so don’t be tempted to sell covers for their own sake - and don’t over-stuff policies when you package them up. Relevance is not only your key to adding value, but it’s also central to the fair value that FCA Product Oversight and Governance (POG) regulations demand.

Do check the covers you’re offering to scheme members. I’ve recently seen an instance where only four of the 17 cover sections offered were relevant to the scheme. When optimising policies for fair value, always remember that if they wrap seamlessly around member needs, then they’ll also look good to the regulator. Keep a close eye on how member needs are evolving and always be ready to remove any unwanted covers.

Digging into the claims data is a really good way of pressure-testing the efficacy of a scheme's policy. Look at the type of claims members make and establish the patterns. You’ll quickly be able to identify surplus cover areas that just don’t get used.

A programme of regular product testing gets more important as a scheme policy gets older, because things change. Using member feedback will enable you to anticipate their future needs and flush out underperforming or non-performing policy elements. Running a regular scheme review programme will also identify weaknesses and errors.

The relationships between brokers and insurance providers are typically built up over many years. The cost of change can be off-putting, and there’s a perception that a broker switching to a new underwriter is a negative thing. Far from it: in the right circumstances, moving to a new underwriter can be a smart move because you are putting the member at the centre of things. And that’s a very positive message for members to hear.

No member customer has complained about being contacted too much, but many have complained about being contacted too little - so be proactive and be accessible. Just because you’ve had no complaints isn’t necessarily a good thing, as some members will just prefer to walk away at renewal time. Complaints are a gateway to improvement, and one type of complaint may also be shared by others. Uncovering complaints or similar issues gives you the opportunity to fix things, and when done quickly and efficiently, that will help at renewal time.

As policies mature, so do wordings age too. For instance, if you’re seeing policies that feature the words ‘curios’, ‘hi-fi’, ‘pager’, or ’palmtop’, then you’ve got an obsolete terminology issue. It may seem obvious, but make sure your wording is modern and right for the membership demographic. Good policy wordings showcase your values and your brand, so make them easily available. People are generally talking less and interacting digitally more, so share them on your website. It’s a simple way of demonstrating the power of difference.

Competing on price is important. However, if you can deliver a simple, efficient scheme product that does what it says on the tin, for the right people and in the right way, then that’s more valuable than a less efficient policy you can sell for less. If that message needs communicating, then do it - member education is also part of the sell. Don’t be nervous about putting value first because it commands a higher cost for the member. By the same token, don’t over-engineer because it adds extra cost for no reward.

History is littered with products that flopped because they were flawed. Schemes' insurance products are no different - and here’s the lesson: when you know your audience, work with them, work for them and respond to them, they’ll do three things. They’ll respect you; they’ll advocate for you - and they’ll renew with you.