Life companies’ outdated technology has been blamed for the ongoing poor pensions and annuities service levels affecting advisers and clients.
Paul Yates, iPipeline product strategy director, told Money Marketing that the problem will persist unless insurers work on improving their legacy technology.
He said: “Much of these service woes are caused by outdated technology many insurers still use, some of which is decades old.
“Interest and demand in the pensions and annuities space is growing, driven by economic conditions, and changing legislation, and legacy systems simply can’t keep up effectively.
“Consumer Duty is only going to increase the scrutiny on systems which hamper a fast, personalised, and engaged service experience.”
Yates said insurers need to take note of the growing adviser backlash against them, adding that “we expect providers to find the noise will only increase and become intolerable.”
This week advisers contacted Money Marketing to share their difficult experience dealing with insurers as they arranged annuities and pension transfers.
Many of the household insurers including Aviva, Canada Life, L&G were reported to have poor annuities service levels.
“I’m buying annuities for three clients and I’m finding the service standards from annuity providers and insurance companies just horrific at the moment.
“For two months now I’ve been phoning Aviva every week and they keep saying they are doing a manual calculation of the transfer value. They should have dealt with it within 10 days of receiving the request,” an adviser told Money Marketing.
“[I’m] having a headache as we speak with a case that’s dragging on. It’s like stepping back into the dark ages with some of these firms,” another adviser said.
“Absolute shocking experience and process. Couple of emails from yesterday when a colleague chased the transfer of funds. Hang your heads in shame life companies,” another added.
“I have two in progress. Not moving fast. Clueless staff in the providers. All a big headache and a hell of a lot of work,” yet another said.
Money Marketing understands this is a sector-wide problem as demand for annuities rose following Liz Truss’s mini-budget last year, which caused chaos in the markets.
Many annuity providers are thought to have been caught out by the surge.
Yates said the old technology used by many insurers and providers is failing consumers and advisers.
“Consumers and advisers demand better, faster and more detailed access to policy details and enhanced servicing capability, which is what modern provider technology enables. It also helps to improve adviser productivity; great systems and great service free up advisers to do what they do best, advise,” he added.
He said this same legacy issue is affecting the effective roll out of pension dashboards.
“Legacy technology among providers in the pensions market is a key inhibitor of connected, forward thinking initiatives such as pensions dashboard. Systems which deliver poor experience also often pose huge risks on data security.”
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