What makes a given scheme the envy of the market? It’s a big question. But first, some important context.
The FCA’s new Product Oversight and Governance (POG) regulations came into force on 1 October 2021. These are new systems and controls to design, approve, market and manage insurance products that are compliant, offer fair value and above all, perform for broker and member alike. They also represent a golden opportunity for you to grow and develop your schemes.
Major regulatory overhauls often have a ‘Ronseal’ effect on the market and POG is no different. It’s a time to pause, check - and make sure your scheme is doing what it says on the tin. Below are my top tips for working within POG that’ll help you take your schemes to the next level.
Schemes are specialist, sector-driven products and members expect specialist value that services their niche accurately. Many sectors have undergone radical change in the last few years: what worked before may not work so well now. Examine your scheme markets and look for the big shifts. How have risk profiles changed? How has member behaviour changed? How has the channel to market altered? Always put regular, analytical time aside to observe, process and respond.
There’s always a temptation to recycle policies, but they can age over time, decaying in terms of the protections they offer and how they stack up against competitive offerings. This ties back to relevance: build the evidence of empirical change into your schemes. The policies are bespoke and must always be wieldy, simultaneously being right for the sector and right for a given set of members whose businesses are rarely static.
What are the common points of failure I see? The devil’s often in the detail. Special wordings or extensions can easily become dated if not reviewed on a regular basis. Sometimes it’s the most basic things too: customer service numbers that have changed; discontinued emails or contacts where the individual has changed roles or moved on. Then there’s the 'cut and paste' that decreases value - a very common practice.
Check the scheme member demographics - are they still who you think they are? What’s the pattern of growth versus stagnation or shrinkage? Check the complexities - what’s changed for them that may have exposed new or amplified risks? How have transaction preferences changed? Look for those opportunities where change gives you the opportunity to add value and competitive edge.
Gather all the member feedback you can. Collating this information helps you spot trends within the scheme membership - as does regular dialogue. Are you making the most of all the touchpoints scheme members have with you? Are those touchpoints still valid?
We all know the one about the policy document that’s so perfectly compliant that it’s effectively meaningless to the member. Too often the first time a member reads the policy is when it’s time to claim after an event. Think plain English and break that cycle. Think shorter sentences. And with so many great digital interactivity tools available, think presentation too. All these things feed into the fair value elements of POG: making it easy for members to understand and engage with their schemes cover.
Think about how you position and promote your schemes offerings online - it’s so much more important now. Your website is your shop window and many fail to nurture it properly. When was the last time you reviewed your online schemes content? Is your messaging tight and focused? Does it (still) resonate with your target membership? Does the scheme product still match your brand values and vice versa? There are digital issues to address too: is your site content optimised for search? Does it display well on tablet or smartphone? When did you last upgrade how you present your scheme propositions in line with digital best practice?
You’ll know who’s competing in your space. But how are they innovating and what are the potentially disruptive new angles that new entrants are bringing? It’s easy to follow the ‘if it isn’t broken, don’t fix it line’. However, just because life is comfortable and your lapse ratio is low, it doesn’t mean you shouldn’t watch both your flanks and the horizon to improve.
As you keep kitchen knives sharp, the same thinking should be applied to the performance of your scheme. At Ecclesiastical, we blend all these activities in the way we run a 360° review of the schemes we support. Like for like comparison, breadth and relevancy checks are key, backed by traffic light gradings.
Scheme reviews are a journey of rediscovery and refinement. One of the most important things is ‘fresh eyes’. We rotate scheme reviews through different teams to keep perspectives observant and objective, creating a disciplined approach that benefits the membership. Ultimately, schemes insurance is about managing dynamic change through good member and broker relationships where we act for you and with you.
David Gabb, Product and Proposition Development Manager at Ecclesiastical InsuranceDavid manages our product and propositions development for schemes. A schemes technical underwriter with us since 2011, David has over 17 years’ experience in personal lines and commercial insurance products. He and his team review and develop schemes to ensure that they are fit for target market and are built around the combined needs of member and broker in a way that ensures a superior experience at every stage of the journey.