Bulk purchase annuity (BPA) insurers should publish a consistent set of annual member experience and service metrics for buyout policyholders, Law Debenture and LCP have said.

The firms argued that greater transparency would make it easier for trustees to compare providers, encourage continuous improvement and help ensure that member service remains a priority throughout the lifetime of each policyholder.

They warned that it was currently difficult to consistently assess insurers’ performance on member service or to make reliable comparisons between providers.

BPA insurers vary considerably in size, maturity, and operating model, with some administering large, established buyout populations and others serving smaller but rapidly growing groups of policyholders.

Some insurers deliver administration in-house, while others use third-party administrators.

Providers also offer different services, including technology platforms, independent financial advice, in-person events and online GP access.

Law Debenture and LCP stressed that these differences made consistent and comparable reporting particularly important.

Although insurers already collect operational and customer service data for Financial Conduct Authority Consumer Duty requirements and share information with consultants, much of it is not published openly or on a standardised basis.

The firms therefore called on every BPA insurer to report annually on its service-level targets and performance for retirement and transfer quotations, settlements and bereavement cases.

Insurers should also disclose target and actual response times across written, telephone and digital channels, alongside complaint volumes, the proportion upheld, average resolution times and the total value of compensation or redress paid.

Other proposed measures included Net Promoter Scores or equivalent customer satisfaction figures, as well as the number and duration of service interruptions, administration errors and actual or near-miss data incidents.

Crucially, the firms argued the information should relate specifically to buyout policyholders rather than being aggregated with other business lines.

Law Debenture trustee director, Lynne Rawcliffe, said: “A buyout should secure more than the promise of a pension. It should secure a good experience of receiving it.

“Many insurers are already collecting information to assess the quality of member services, but these are not shared publicly. This makes it difficult to compare providers without incurring additional advice costs.

“Making information public could also incentivise insurers to continue to provide a high-quality service well into the future.”

The article noted that, while some insurers were investing heavily in member services, there had been instances of policyholders facing significant delays in receiving benefit quotations shortly after buyout.

Other policyholders had experienced pension increases being applied late or incorrectly.

Although these issues currently affected only a minority of members, Law Debenture and LCP warned that the individual impact could be material and the number affected could grow as buyout populations increase.

They also questioned whether investment in member service would be maintained over the longer term once the BPA market matured and insurers were managing shrinking balance sheets and policyholder populations.

LCP senior consultant, Katie North-Walker, noted that insurers already shared extensive information about their member experience propositions with professional advisers.

“However, as demand continues to grow and insurers look to innovate and differentiate, it can be difficult for trustees to accurately rank providers on the basics,” she continued.

“Clear and transparent reporting would make it much easier to benchmark performance across the market, driving higher standards and helping insurers demonstrate how they are meeting their Consumer Duty obligations to deliver good outcomes for policyholders.”

Pension Insurance Corporation (PIC) backed the proposals, stating that its existing reporting already covered many of the recommended measures.

PIC head of customer operations, Andy Rose, added: “We support the recommendations and believe greater transparency in customer service reporting can help drive accountability and raise standards across the industry.

“It enables policyholders to better understand the service they can expect, while helping providers demonstrate to trustees how they are delivering on their commitments.”

Law Debenture and LCP stressed that the aim was not to create a burdensome reporting regime or require insurers to operate in the same way.

Instead, they argued that consistent disclosures would help trustees make informed provider-selection decisions, give members confidence that their interests remained central after buy-out and allow insurers delivering high-quality service to demonstrate their performance.

The firms plan to work with insurers and other interested parties to develop the initiative.

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