Increasing the utilisation of legal expenses is a win-win

It’s something of a paradox that legal expense insurance, which represents one of the most meaningful and cost-effective ways of providing people with access to legal support – especially at a time when their rights to justice are being hollowed out by cuts and reforms – remains one of the least understood products in the UK insurance market.

A recent editorial published by Insurance Times in June 2020* reported that 33% of people believed that making a personal injury claim would affect them financially, a figure which rose to as high as 45% in respondents aged over 65.

It’s a sad indictment of our times (and perhaps our industry) that in 2020, citizens of the UK still believe access to justice is a privilege for the few rather than a fundamental right for all, or worse still that many of them are unaware that they hold cover which affords them that right, regardless of their financial means.

It leaves you pondering whether the legal expenses sector has lost either it’s moral compass, it’s sense of purpose or worse still, both.

The exceptionally low utilisation rate of legal expenses insurance could leave some to assume that some, less customer-focused insurers and brokers must be laughing into their sleeves – but perhaps it speaks more to a wider, more serious issue – a collective abdication of our social responsibility.

In our recent survey of the legal expenses market with insurers and brokers, 70% cited consumer knowledge as being the biggest obstacle to greater take up of the product. I’d wholeheartedly agree with that view, but when it comes to answering the question of who owns the responsibility of better educating the consumer, you can almost hear the collective sound of fingers being pointed.

Given the worsening state of the justice system in the UK, the time is certainly right for a discussion on how we can increase the take up of legal expenses insurance – but not without challenging ourselves on how we can help the customer derive greater usage and benefit from having it.

Empirical evidence exists which shows a direct and positive correlation between having insurance and the increase in utilisation of the services that can be accessed through the cover it provides. You need look no further than the health sector as a perfect example of how insurance has lowered the barriers of entry to health care services for millions of people in countries across the world.

When it comes to legal services and access to justice, legal expenses insurance holds an equivalent weight of promise.

It’s time for the legal expenses sector to step up to the plate and embrace the idea that improving utilisation is not only good for the customer but good for the industry as a whole, as a means of further fostering our reputation, growth and greater customer loyalty.

*Insurance Times, June 2020 – Two-fifths of individuals do not know how to make an injury claim