The very nature of insurance and pooling risk means that there will always be some people denied cover.
This becomes an ever more emotive subject when customers are denied protection in situations where customers are particularly vulnerable.
This can range from those with sickle cell, disabilities, to those who are neurodivergent or advancing in years, and sometimes inaccessibility is purely down to the price proving too steep for some customers’ pockets.
But while advisers are welcoming new more nimble entrants to market, consolidation has not helped matters.
And even though the sector is clearly striving to make improvements where providers are employing technology more, taking a more personalised approach to underwriting or improving terms for conditions such as cystic fibrosis, HIV and diabetes, meaningful change cannot come soon enough for advisers operating in the market.
This is all leading to some advisers to ask the question, does this sector want to be known for elite products that exclude so many people from accessing them?
Pooling risk
“The fundamental principle of insurance is about the pooling of risk,” Justin Harper, chief marketing officer at LifeSearch, tells Health & Protection.
“When considering higher risk consumer segments, together with higher degrees of uncertainty and innovation, providing long term insurance is far from straightforward.”
“Coupled with that, insurers and reinsurers are intrinsically risk averse,” Harper adds.
But Harper maintains that in a sector where less than half of people have any form of protection insurance cover and where there’s an increasing protection gap and falling numbers of new sales, the industry is not inclusive enough.
“And that goes beyond physical and mental health issues, it stretches into lifestyle, working lives, home ownership, buying behaviour and the diverse and evolving needs of everyday life,” he says.
Locked out of income protection
Elaborating on which groups are being locked out of cover, Andrew Wilkinson, director at Moneysworth, points to older clients, aged over 60, who are blocked from accessing income protection, as are applications from people living with several different health conditions, especially heart-related conditions.
But Dr Sheun Oke, CEO at Emergenzz Financial Services, also points to an issue she referenced back in March of this year, of new immigrants who have under two years of GP records and cannot access income protection.
“Some people have come to the UK and don’t have income protection,” Oke says.
“There is a lot of immigration coming into the UK. Why is it two years of GP records?
“If all is clear, why would we not offer them income protection?”
Women’s health
Oke also maintains body mass index (BMI) is a poor means of measuring health in women going through menopause and for black women who are paying a premium for not conforming with a European standard.
While recognising the sector is still falling short for many individuals with specific health conditions like sickle cell, neurodiversity, and disabilities—both mental and physical, -Joanna Streames, owner of Velvet Mortgage and Insure Services, echoes Oke’s sentiments, adding women’s health and older customers are also often underserved or face higher premiums.
“The sector needs to recognise the unique challenges these groups face and work towards fairer, more inclusive coverage using tailored underwriting approaches, expanding cover for specific conditions and taking women-specific health factors into consideration such as pregnancy, menopause etc,” Streames says.
Not all bad news
But it is not as if insurers are sitting on their hands.
Kristian Breeze, director of healthcare at Ascend Health, points out that health insurers have made progress in implementing more personalised care plans, particularly for those with chronic conditions, as well as increasing awareness around mental health.
“For instance, many policies now include mental health treatment as standard, a significant change from just a few years ago,” Breeze says.
“Digital health services and telemedicine have also enhanced accessibility for a broader range of people, including those with disabilities.”
Alan Lakey, director at CIExpert and Highclere Financial Services, tells Health & Protection HIV and diabetes sufferers are now able to obtain terms.
And Alan Knowles, co-managing director at Cura Financial Services, reveals he has seen definite improvements for life cover for people living with cystic fibrosis.
Action from insurers
But what of the insurers and mutuals? What action are they taking to improve matters?
Oliver Jones, commercial director at National Friendly, tells Health & Protection that for its PMI cover, it has increased the maximum age for new customers to 85 as of last year, making it possible for people to either switch or buy a new policy at an older age.
“For people with health conditions that could prove a barrier to products like full income protection, we have launched two new products, Accident Only Income Protection and Friendly Shield,” Jones explains.
“They require no upfront underwriting for people who would usually be excluded, which gives them limited but important cover against unforeseen events like accidents and fractures, as well as access to private care and rehabilitation, in a cost-effective way.”
Alex Yates, head of underwriting at British Friendly, says that the mutual has taken action amid an increase in people awaiting a diagnosis of clinical neurodiversity such as ADHD (attention deficit hyperactivity disorder).
“Historically, underwriters may have postponed anyone awaiting an assessment like this,” Yates explains.
“Given increased awareness of ADHD and more people seeking to understand themselves better, we don’t feel customers awaiting an assessment always warrant postponing.
“We’re happy to consider these customers on a case-by-case basis and look at what prompted the assessment, what symptoms the customer has had and any impact on their work.
“We can then often offer terms whilst the assessment is awaited. We may want to apply an exclusion for ADHD but could review this depending on the eventual outcome of the assessment.
“For treatment relating to women’s health, we make it clear on the application form that customers don’t need to tell us about tell us about contraception, HRT [hormone replacement therapy] or fertility treatment.”
Christine Milsom, head of claims and medical underwriting, group protection, Canada Life, says the insurer is seeing efforts being made across the protection industry to improve customer engagement and value.
“This starts with the basics, from rolling out new processes and document requests – such as providing alternative formats like braille, large print, coloured paper or audio – to improving accessibility standards on company websites,” Milsom says.
“At Canada Life this also includes evolving customer propositions and support services to ensure they remain relevant and continue to meet the needs of our employee customers.
“Many of our services can not only be used by our customers but also by their immediate family members as well.”
Adoption of technology advancements
Adoption of improved technology across the sector is also helping to improve accessibility, according to Alan Waddington, distribution director at Cirencester Friendly.
“Not only does it mean more potential customers can access the information they need about protection it also means providers can speed up their processes, understand trends and patterns in data more quickly and react faster to changes in health outcomes,” Waddington says.
Gary Beyer, protection proposition director at LV=, says: “The design of our products continues to be driven by customer need as well as advances in medical science and technology, aligned with how we can best serve our customers with clear conditions and flexible features.”
Justin Taurog, managing director at Vitality Life, maintains technology has continued to transform the industry, supporting firms to write cover for clients with more complex health issues.
“Our pre-underwriting tool shows advisers what options are available to their clients, automated underwriting means more clients get automatically approved cover, and new software deployed earlier this year provides GPs with technology to better support them to provide medical reports, making the process quicker and easier,” Taurog says.
Genetic information
But increased access to genetic information and insight also has a role to play, says Peter Hamilton, head of market engagement at Zurich.
“Access to genetic information and insight is hugely positive for society, and we should welcome it, while giving thought as to how we continue to protect the financial futures of those in the pool who really need insurance,” Hamilton says.
“Ultimately, finding a way to manage the range of risks may need greater State interaction/intervention, possibly on the lines of the Flood Re initiatives we have seen that helps those living in areas prone to flooding access insurance that might otherwise have been unavailable or unaffordable.”
For Dr Doug Wright, medical director at Aviva UK Health, the industry is waking up the fact that personalisation is increasing in importance.
“When it comes to health, there’s now a recognition that there’s no ‘one size fits all’ solution,” Wright says. “Personalisation is key.
“Not only does this help enable a more inclusive work environment, but by offering support for women’s health for example, employers can play a role in helping to tackle health inequality.”
Role of group cover
But it is also clear that covering an individual is easier in a group as Debra Clark, head of wellbeing at Towergate Health & Protection, explains.
“Individual insurance cover, as opposed to group cover, can be tricky in the health world when it comes to underwriting as there is usually less flexibility with consumer purchases,” Clark says.
“Group cover has an advantage as it enables wider cover for more people more easily.”
Market consolidation and new entrants
But providers leaving the market is throwing a further spanner in the works to inclusivity of access as Johnny Timpson explains.
“A further challenge being that the vaping and international customer niche needs formerly served by Canada Life and AIG respectively, remain to be filled following their market exits,” Timpson tells Health & Protection.
“This said, I’m encouraged by the progress being made by new entrant Blueberry Life in meeting the needs of diabetic consumers – plus the growing support for peri menopausal and menopausal women applying for insurance.”
Harper too welcomes these “newer, and more nimble” entrants to market.
“They are able to focus on more specific risk areas in underwriting, and create enhanced experiences,” Harper says.
“These providers are using new technologies, such as AI, to improve underwriting models and help protect those who may have previously struggled with cover.
“Blueberry Life is a prime example of this and are helping those with chronic conditions such as Type 2 diabetes, to receive quick and personalised cover.”
Humble cash plan
But it’s not just nimble new entrants to market that can offer more inclusive solutions.
Paul Shires, commercial director, Health Shield, points to the benefits offered presented by the humble cash plan.
“A huge advantage of cash plans is that there is no medical underwriting or moratorium on corporate paid schemes, which makes them truly inclusive,” Shires says.
“They are designed to offer essential cover such as dental and optical to everyone in the workplace. They can be incredibly useful to those with existing conditions or those struggling to access support via other routes.
“For example, assessments for dyslexia and dyspraxia are available, which are often subject to long waiting times on the NHS or not fully covered by other medical insurance.”
But ultimately, amid these myriad challenges, the industry needs to ask itself a question, according to Knowles.
“Do we want to be an industry that excludes so many people from accessing our products?” Knowles asks.
“Of course insurers would prefer to have customers who are in the best of health,” he continued.
“But I would argue that many individuals with medical conditions make improvements to their health, are proactive about their health and engage with medical services; all of these are positive factors that reduce their risk.
“The person who is seemingly very healthy with no disclosures, likely doesn’t engage medical services and therefore has no idea what’s going on in their body and what risks they might carry… are they really that much lower risk?”