Briefing: Is there such a thing as a non-vulnerable customer nowadays?

By Associate Editor Katie Scott

Shortly after I joined the Insurance Times team last October, I interviewed Matthew Maxwell Scott, executive director of The Association of Consumer Support Organisations (ACSO) - something he said has very much stayed with me ever since.

At the time, we were talking about the (still) impending Litigants in Person (LiP) portal ahead of its initial April 2020 deadline, as well as discussing some of the implications for credit hire firms. However, it was Maxwell Scott’s comments on vulnerable customers that really struck a chord.

He told me: “The FCA says 54% of us are vulnerable or potentially vulnerable consumers and actually, what we’ve said to them is they haven’t looked enough [at] the particular vulnerability that comes when you are a claimant.

“I’m not a vulnerable person at the moment. As soon as I am injured in a road traffic accident and I’m distressed and I’m making a claim, I think there’s a vulnerability there.”

This was something of a lightbulb moment for me – I do not consider myself a vulnerable person or customer in any way, yet following a road traffic accident I was involved in just a few days before starting at Insurance Times, I completely understand and appreciate what Maxwell Scott was saying and it backed up how I was feeling myself.

Now, with the Covid-19 pandemic, vulnerability has yet another new, unexpected guise. Robin Challand, claims director at Ageas, who I chatted to last week, emphasised that vulnerability is not just linked to age anymore and that it can be linked to the circumstances of particular incidents – such as RTAs or the pandemic.

This is a view also expressed by Steve Whitfield, senior consultant at Altus, who told me earlier this year that “the thing some insurers potentially find difficult to get their head around is that vulnerability isn’t a permanent position. It’s not you are vulnerable, or you are not vulnerable. It can be, especially in times like now, a temporary position”.

This could include, for example, individuals managing on a lower income due to being furloughed or having to take a pay cut, as well as those who may have caught the virus or who are having to shield or self-isolate because they are classified as being more likely to catch coronavirus.

Plus – let’s face it – the pandemic has impacted all of us in ways we perhaps didn’t expect.

These conversations got me thinking whether vulnerability and being a vulnerable customer is now the norm and whether there is such a thing as a ‘non-vulnerable’ customer today?

With the post-pandemic world still painted as a very uncertain place, I doubt that situations which lead to vulnerability will disappear any time soon.

If the ratio of vulnerable customers does escalate and the definition of a vulnerable customer evolves, then the onus is surely on insurers and brokers to provide relevant support throughout the insurance journey.

Whitfield believes insurers “should be doing more to help understand and recognise vulnerability within their customer base”, including “being able to train your front line staff to be able to recognise signs of vulnerability. It’s then being able to put processes and treatment strategies in place to ensure that you are treating those vulnerable customers fairly”.

I’m sure many across the industry are already mulling over how to treat this new breed of vulnerable customers and it’ll certainly be interesting to see how the conversation develops as we enter 2021.