Ahead of the 40th anniversary of the launch of the world’s first critical illness (CI) product on 6 August, Health & Protection speaks to Johnny Timpson about meeting Dr Marius Barnard – the brains behind this first policy at an industry conference, how his work as a surgeon influenced its design and how he answered Timpson’s call to come out of retirement to help develop a new CI offering for customers in the UK.
Work as a surgeon
“The very early types of policy paid on a health event were cancer policies in Texas in the middle of the 20th century but they didn’t they didn’t sell particularly well,” Timpson (pictured) tells Health & Protection.
Dr Marius Barnard was the brother of Professor Christian Barnard, Marius was a vascular surgeon and Chris was a cardiac surgeon, Timpson explains.
While Dr Barnard did a lot of his training in London, he then went out to the US and trained as a surgeon in Texas which was how he became aware of policies that paid out on the definition of a health event.
But Timpson says while the idea of such policies never left Dr Barnard, he subsequently returned to South Africa where he became a pioneering and successful vascular surgeon.
“So he and his brother performed the world’s first successful human to human transplant in December 1967,” Timpson continues.
“And that was the moment Marius said the world stopped. It was a huge international event and he and his brother became major international celebrities.
“Marius became an international super surgeon. He toured the world training other vascular and cardiac surgeons and went on to specialise on kids and developed a number of procedures with children.”
Surviving major conditions
It was at this time that Dr Barnard became aware that advances in medical science were starting to mean people who previously had developed conditions and died of them were now living with those conditions and surviving.
But because of the degree of surgery involved and the degree of medical pharmaceutical intervention, both before surgery and then after surgery, in a lot of instances, that person’s health never fully recovered.
“Their ability to work and earn never really recovered,” Timpson continues.
“So while he had kept them alive physically, their health and wellbeing died because they could no longer work. And then they just ran out of funds effectively.
“At that point, Marius was also the chief medical officer for a number of life insurers in South Africa and was very familiar with life insurance and making decisions on advising underwriters in terms of their underwriting, of accepting risk and their approach to claims.
“So he decided that advances in medical science were such that things had to change.”
Dread disease policy
What Dr Barnard saw the need for was an an insurance policy that did not pay out on the diagnosis of death, but paid out on the diagnosis of a health event that would be either life changing or life limiting.
“That gave him the idea to develop thinking around something he called a dread disease policy for conditions that you would get that you could now survive thanks to medical intervention,” Timpson continues.
“You would dread it because you’d never be quite the same again. And that’s how that technology came about.”
This all led up to an approach to life insurer Crusader Life which developed the world’s first critical Illness insurance policy with three definitions – cancer, heart attack and stroke when the policy was launched.
No coincidence about launch date
The chosen date for launch was no coincidence though.
“They brought that policy to the world on 6 August 1983,” Timpson explains.
“The reason they chose that date was it was Marius’s eldest child Naudene’s birthday on the 6 August.
“The dread disease policy started to take off and develop a bit of traction in South Africa, mainly through direct sales agencies in South Africa, but was first brought to the UK in about summer of 1985.”
For the next six years, Timpson adds Dr Barnard combined his medical work with writing columns and work as a TV medical doctor.
But in between his practice and work with the media, he was touring the UK and the US advocating that insurers should embrace this creation of his – dread disease.
Meeting at the Barbican
While the name was not particularly marketable, Dr Barnard attended a conference organised by the Life Insurance Association (LIA) at the Barbican.
That 1991 conference woud prove momentous for both Dr Barnard and Timpson.
“This was where I first met Marius. He presented critical illness and actually described it as critical illness then,” Timpson says.
“And there was a video produced called The Widow’s Story, which was the first time that video had really been used to tell the story of what happens when someone gets a life limiting, life changing medical diagnosis.
“It told the story of a family. The breadwinner developed a medical condition and subsequently died.
“It was a bit like Sliding Doors presenting what happened if there was no life and critical illness insurance policy, what happened if there was and that became an LIA produced video and that became a mainstay of training.
“The video that promoted the whole concept and on the back of that life critical illness insurance started to really take off.”
At the time of the conference Timpson was working for Scottish Widows who would later be taken over by Lloyds Banking Group in 2000.
Developing a new more accessible CI policy
In later years, Timpson would be charged by Scottish Widows and Lloyds Banking Group to work on the development of a critical insurance protection proposition with the mission of providing a very accessible solution.
In order to cover more customers, Timpson explains the policy was designed with a “very accessible” underwriting policy in order to pay more claims.
Plan for Life came into being with critical illness as the primary sale, featuring underwritten quotes where customers were underwritten as the insurer was taking their information.
It was also supplemented with videos explaining how the policy worked and an annual benefits statement, which Timpson adds Scottish Widows and Lloyds Banking Group still use today.
Bringing Dr Barnard out of retirement
But a key element in developing the plan was Dr Barnard, who Timpson brought out of retirement in his late 70s.
“I employed him as a consultant at Scottish Widows and we developed the plan together and he went round the country with me for four years,” Timpson continues.
“We originally focused on the Lloyds plan. We used to have protection advisers everywhere so we focused on training all of them.
“But having done that, we trained IFAs. We attended roadshows up and down the country for many a year.”
It was over that time again the two bonded, with Timpson describing Dr Barnard as “almost” like a second father.
Timpson adds that Dr Barnard treated him like one of his own, and while Dr Barnard passed away almost 10 years ago, Timpson says he knows all of Dr Barnard’s family and remains in touch with them to this day.
Is there a doctor in the house?
But reflecting on that initial time together, Timpson points to a train trip to Aberdeen in 2006.
“We were on a train up to Aberdeen to speak to Sesame, we were just outside Dundee and the train ground to a halt,” Timpson says.
“Someone in the carriage behind us had a heart attack and a cry went out, is there a doctor on the train, well there was because I was sat next to one.
“So in the middle of nowhere I had to clamber down, walk down the embankment and he basically treated this man and we made our way back to Aberdeen.”
Marriage between medical and financial worlds
Looking back at Dr Barnard’s creation, Timpson explains the founder of CI saw it as a marriage between the the medical world and the financial world.
“He used to describe financial advisers as financial doctors,” he continues.
“My view is their role is to make a diagnosis and establish what the customer needs and what their prognosis is, and then prescribe an intervention.
“And he always said: ‘You and I want to improve their physical health and their mental health and wellbeing. Initially, I can give them a medical doctor. I can give them additional years of life, but what I can’t do is give them additional years of quality of life’.”
But Timpson notes still to this day, with advances in medical science, there are always issues.
“In a lot of instances when people have a significant medical procedure, they’re taking ongoing medication,” he explains.
“A lot of instances that does still limit their ability to work and live. There could be side effects from either the treatment they’ve had or the medication that they’re having post treatment.”
Timpson recounts that Dr Barnard saw that while he could give patients extra years, it was down to “financial doctors” to supply them with the benefit to replace the income lost when suffering a critical illness.
“He said: ‘I make a diagnosis, you have to basically do a fact finding, understand what your customers needs are, just as I do, and just as I prescribe a program of treatment, you’re going to make some product recommendation and put those product recommendations in place,'” Timpson says.
“‘Just as I review with the patient, I bring my patient back in for a regular check-ups and reviews, you need to bring your financial patient in for regular check-ups and reviews’.
“So Marius always believed that in relation to critical illness insurance, that ongoing regular follow-up and review was essential.”