AIG Life has unveiled a new underwriting rules engine (URE) and updated intermediated underwriting journey, including around blood pressure, cholesterol, diabetes and previous cancer cases.
The insurer said more than 50 changes have also been made to the underwriting rules and questions to give more customers an immediate decision, reduce the need for GP evidence and increase access to insurance.
For example, women who were previously diagnosed with diabetes in pregnancy will now be asked more questions, rather than seeking a GP report, and then get an immediate decision.
Other examples of how the rule changes will lead to more immediate decisions and more customers insured include:
- Raised blood pressure: more customers will get standard rates, including people who have been on medication for less than six months, while individuals whose blood pressure has not been reviewed within the last year could be rated instead of declined;
- Raised cholesterol: Questions have been simplified and give more applicants an immediate decision, including on critical illness applications;
- Diabetes: customers can now get critical illness insurance when they might previously have been declined, and there is less need for GP evidence.
AIG added the engine now provides a better outcome for people who have had a history of cancer too as more customers will be accepted without a life insurance rating and fewer will be declined for critical illness insurance.
Many of the questions within the rules have been updated to make them more straightforward and easier to answer, alongside redesigning the underwriting process and rethinking what information is needed to underwrite customers and how they get it, AIG said.
It added the new rules engine will wherever possible give an immediate decision or refer cases to underwriters, who will to assess the risk holistically and see if information from the customer could be used to offer cover instead of seeking GP reports at the underwriting stage.
It said the move aimed to help more customers secure and understand protection cover in line with Financial Conduct Authority Consumer Duty principles.
Testing process
Qualitative testing including the language, tone and understanding of proposed underwriting questions was conducted by ID Insight Consulting with 15 consumers and six adviser firms.
Research found the underwriting journey was well-received but highlighted where minor improvements could be made so customers understand the information it’s asking for, and why.
AIG said the consumer feedback found the application journey was straightforward, with a good, natural flow, and they had few issues in terms of wording or understanding, or in the sensitivity of lifestyle questions asked.
Almost all respondents recognised the reason for lifestyle questions and saw them as appropriate.
Help text on how to complete a question, for example, was well received by consumers.
Text such as “advice to reduce alcohol intake while you’ve taken a short course of antibiotics or painkillers can be disregarded” or “we understand this is a sensitive question, it is needed to help us understand your mental health history” has been moved to become part of the question following testing, instead of being provided as help text.
Ensuring customers were not required to over-disclose was analysed as much as the risk of under or non-disclosure, or misrepresentation.
The research found people were keen to disclose fully and that the journey helped them to do that. Most said they would rather give more detail upfront and know it has been provided than come across issues later in the application process or, worse, run the risk of a claim not being paid.
In testing, advisers also said the new journey was clear and a positive development; broadly similar to AIG’s earlier approach but with improved detail of disclosure and a more straightforward application.
Helen Croft, chief underwriter at AIG Life, said: “Launching the new URE means we continue to be agile and advance our underwriting while making it easy for customers to seek insurance today and prepare for tomorrow.
“How we’ve done that should also give advisers confidence that we’ve got their backs in relation to Consumer Duty. Our consumer and adviser journey testing ahead of launch is evidence that customers understand the information we’re asking them for, and that we’re acting to ensure good customer outcomes.”
URE is an upgrade on AIG’s previous underwriting system and built on a partnership with Swiss Re using its Magnum Pure technology.