One of the so called ‘up-sides’ of ‘Jackson’ was that positive efforts could be made to encourage the take up of and create opportunities for BTE. I think it’s fair to say that clearly hasn’t happened. Way before 2010 when Jackson published his recommendations I was wondering what the future of BTE looked like, and 4 years on, I still am.
However, since then we have seen take up continue to decline, there has been an FCA Thematic Review of Motor Legal Expenses, and a variety of research, all confirming that the public are unclear of the benefits of BTE. Not without some merit the blame has been laid at the door of product design and sales methods.
Potentially the news gets worse for BTE when you consider the findings of recent research by The Legal Services Board who commissioned Professor Pascoe Pleasence and Dr Nigel Balmer to understand how consumer demographics, attitudes, capabilities and beliefs impact on their response to legal problems. It found that people have no clear solution or preference in their responses to a problem. More confusingly whether they saw it as a legal problem at all, their perception (often incorrect) of the likely costs of getting help, how serious they considered the problem, their own confidence and capabilities, and their knowledge of legal services, were all impacting on their decision making (or lack of).
To my mind this provides significant insight on the issues facing BTE, the take up and distribution.If consumers can’t recognise a need then they will not appreciate the solution. If the legal profession is just waking up to this realisation, then BTE insurance has even further to travel.
The study also found that when people made informed decisions about what services they needed, available services were often a poor match for need. And if people did not get to the right place quickly, every referral to yet another service resulted in some dropping out. To my mind this points to fragmented delivery.
BTE needs to anticipate the thought process, mindset and needs of consumers of legal services.
- Is this the opportunity for BTE to discard traditional product design and distribution?
- Is BTE still best served as an add- on to motor, home or business insurance?
- Are insurance brokers capable of imparting the knowledge needed by consumers to make an informed decision?
- If not, who is?
I cannot help but think that the answer, as always, is to put the customer at the heart of legal services and design BTE from that starting point. The more we understand, the better we will be at establishing how as a BTE insurer we make legal services really customer centric.
Author: Phil Ruse
head of Legal Protection Sales and Distribution