Putting customers at the heart of our business.

We recognise that our customers are at the heart of our business and that we must work hard to build long term positive relationships with them.

Putting customers at the heart of our business (photo)

Our customer engagement strategy is based upon putting customers at the heart of everything we do. This strategy, which we outlined last year, enabled us to achieve some notable successes in 2012:

  • Improving our customer satisfaction scores.
  • Making it easier for customers to deal with us, by simplifying application procedures.
  • Improving the quality of our customer communications, whether digital or traditional.
  • Maintaining a broad choice of ways to buy our products, such as receiving advice through independent advisers, banks, building societies or estate agents or direct via digital online applications.
  • Ensuring that we provide an efficient and compassionate claims service.
  • Helping our customers to talk about us using social media and access our products through digital applications.
  • Enhancing our digital investment platforms to help customers manage their assets throughout life.

We want to provide our customers with products and services that have a real relevance to their lives, helping them to achieve financial security. In return, we want our customers to engage with us, stay with us throughout life and recommend us to others.

Case study: Every Day Matters – being there for people when they need us | picture of a large poster that says "Change" (photo)


We conduct our business through the lens of Every Day Matters. This includes our broader social purpose, building on our corporate social responsibility agenda and driving our business results.

This purpose focuses our attention and gives us direction. It helps us design products people actually want and need and motivates employees with a purpose they can believe in. 87% of our staff now believe that they work for an ethical company (2011: 84%).

Our ‘One Day’ initiative, an innovative and successful campaign, helped drive employee engagement and embedded Every Day Matters into employees’ lives. This day celebrated everything that happens in one working day all over the organisation. One of the benefits was employees, in very different areas, could share their experiences of making a real difference to customers’ lives. Whether it was dealing compassionately with customers suffering bereavement or simply buying food for a colleague who had to work through lunch on an especially complex customer enquiry. These experiences are featured throughout this report.


Because we often touch our customers’ lives at times when they are under severe emotional difficulties, we understand the importance of efficient service.

In 2012, our life protection, annuities and general insurance service teams improved their customer satisfaction scores from 77% in 2011 to 85% at the end of 2012. We also increased our ‘customer ease’ score (measurement of how easy customers find us to deal with) from 71% in January to 76% in December against a stretching target of 75%.

How we made it easier for customers to deal with us

  • We introduced a coaching programme for our managers to build improved skills when dealing with customers.
  • We re-wrote 18 regularly used letters for new customers and eliminated 1.5 million duplicate letters.
  • We made our online quotation and application processes quicker and less stressful.

We have delivered a better claims service

Our underlying purpose is to provide customers with peace of mind, while being there to help them if they need to make a claim by ensuring that all valid claims are paid efficiently and compassionately.

  • We substantially reduced the average life claims turnaround time from 32 days in January 2012 to 23 days at the end of December 2012.
  • For critical illness claims, which are more complex, we improved average claims turnaround times from 49 days in January 2012 to 42 days by the end of the year.

How we did this

  • Issuing claims forms within 24 hours of being told about a claim and aiming to complete all claims work within 48 hours.
  • Using text messages to update customers on the progress of their claim.
  • Phoning customers and medical specialists to check that they have received our documents.
  • We improved our general insurance fraud processes, focused our effort on resolving our oldest claims, reduced our open claims by around 36% and released £5m of reserves.

Transforming our savings customer communications

We have used the guiding principles of Every Day Matters to ensure that our communications are easy to understand, using simple jargon-free language explaining clearly how the plan works and its value. We have now significantly improved annual statements throughout for our savings businesses. For workplace savings, 89% of customers agreed that our new statements are ‘simple and easy to understand’.


2012 proved to be an exceptionally busy year for delivering new or enhanced products and services. Regulatory changes drove many developments such as the FSA’s Retail Distribution Review, auto enrolment of workplace pensions and gender-neutral pricing.

Delivering changes for auto enrolment and the Retail Distribution Review

In 2012, much of the effort of our Savings division was dedicated to ensuring that these two massive projects were delivered on time. Both the RDR and auto enrolment required fundamental changes to the way customers buy our products. We changed the pricing structures for most of our savings products and delivered projects to upgrade our administration systems and processes.

Introducing gender-neutral pricing

We introduced gender-neutral pricing on 21 November 2012 for annuities and on 21 December 2012 for individual protection, becoming the first provider to do so in the UK protection market.

A Gender Response Team was introduced to manage and process the pipeline effectively, supported by a new in-house pipeline management tool called Pipetrack. Over 93,000 reviews were completed.

This was supported by the ‘Time waits for no woman’ campaign that received positive feedback from advisers.

Diversifying our general insurance business

Over the year we introduced three product enhancements to support our vision to be an outstanding, innovative and responsible provider of personal insurance solutions:

  • Home Insurance Enhanced, our premium offering, was launched in September 2012.
  • Favourites Rewards Club for existing customers, launched in October 2012.
  • Pet Insurance was launched in November 2012.

In 2013, we aim to introduce additional major general insurance products, giving us a product range that is comparable with many of our main competitors.


RDR involved changing existing new business policy, administration and accounting systems, building a completely new point of advice system for banks and building societies and our own salesforce, developing and launching new ‘RDR-friendly’ products, upgrading our investment platforms and re-training our own salesforce and back-office teams.

While we have seen many high-street banks only continuing to offer advice to those customers with high levels of savings, we remain committed to continuing to give advice to less affluent customers.

Helping customers who prefer to deal directly with us

In 2012, we expanded our direct annuity service for a growing number of customers who feel comfortable making their own decisions. Many customers now use the internet for annuity information and have the confidence to buy direct. We routinely health-screen every annuity customer and offer them the best rate from the information they provide. While this service is non-advised we can offer advice to those customers who need it. We also ensure that our own maturing pension customers have access to our enhanced annuity product.

We also developed new direct facilities in Group Protection and Liability Driven Investments (LDI).

Our mortgage network

We continue to attract good quality advisers to our mortgage network. In 2012, we successfully won a major Appointed Representative deal in the sector, by recruiting the Spicer Haart Group, which sells mortgages and related financial services through the largest independent chain of estate agents in the UK. In addition, 65 former Co-operative Financial Services advisers have joined firms in our network, spread across a number of firms, and some new firms have been established from groups of advisers.

We successfully delivered RDR training to our active wealth advisers. One hundred per cent of our advisers passed the residential course assessments, enabling the network to go live in December ahead of the 1 January 2013 deadline. The network offers a strong proposition to Appointed Representative firms, and against a backdrop of other networks raising their fees for advisory firms, we announced a ‘fee freeze’, promising to keep our mortgage and protection fees unchanged, until at least January 2014.

Case study: How we will continue to provide Access to advice for Customers | picture of pedestrians on a crowded sidewalk (photo)


We have established relationships with the majority of UK building societies. Eighty seven per cent of UK building society customers now have exclusive access to our products and investment platforms. This covers over 20 million members, with total assets of £270bn. We are very well placed to help building society customers protect their mortgages and families and to help them build savings assets.

Customers can receive advice on their financial needs from our specialist salesforce in high-street branches of a number of building societies.

We can also help customers through our direct business processes. We are already seeing increased sales of retail protection and general insurance from direct customers.