Securing a quick underwriting decision seems to be increasingly dependent on the insurer advisers are dealing with and how these firms embrace technology.
It is clearly becoming more important for insurers to embrace and integrate technological advancements into their underwriting processes, with difficulties in securing GP reports and an increase in mental health disclosures from clients proving particularly problematic.
The issue of ‘chance finding’ of asymptomatic or benign conditions is also proving a dilema for customers seeking insurance.
And while insurers are reporting success when it comes to integrating technology and some advisers note the underwriting process has improved, others would like providers to move at an even quicker pace.
GP report hold ups
According to Debbie Kennedy, chief executive officer of LifeSearch, the general trend of customers not being able to access face-to-face appointments with their GPs as easily and quickly as they would have; combined with multi-year waiting lists for NHS treatment will mean a shift in the way firms underwrite.
“We are no longer able to get accurate and up-to-date information from the GP report,” she said.
“This will mean other forms of evidence such as mini-medicals and pharmacy checks-ups might prove more valuable.”
Kennedy added the firm is also seeing a rise in customers disclosing mental health issues.
“These disclosures aren’t always a confirmed clinical diagnosis but range from the customer self-reporting feeling ‘stressed at work’; such as being anxious, or unable to sleep,” she continued.
“Insurer application questions can be long winded and try to catch all and any disclosures on mental health. This can lead to over-disclosure and our underwriters not able to get an accurate picture of the customers’ general mental wellbeing.
“In addition, musculoskeletal disclosures are also increasing; whether this is an impact of working from home is yet to be seen.”
Accepting customer supplied information
However according to Alan Lakey, director of Highclere Financial Services, for the most part underwriting is improving, with insurers and reinsurers prepared to accept applicants they would have declined a few years ago.
But Lakey maintains that often insurers have conflicting views on applications which is where additional skills are needed or alternative specialist advisers are required.
Cura Finanical Services managing director Alan Knowles (pictured) told Health & Protection he is seeing a positive trend around the acceptance of customer supplied medical information.
“We are seeing more customers, even some with complex conditions, being accepted based on specialist letters supplied by the customer,” he said.
“This saves everyone time and enables customers to get cover quicker, so everyone wins.”
But Knowles added that another area he is seeing come up more often are people who have had a ‘chance finding’ of a condition – things like aneurysms and benign brain tumours where they are discovered by accident, for example on an MRI due to another symptom or condition.
“Despite being asymptomatic, people in these circumstances are now really struggling to access protection insurance,” he warned.
“Most insurers require tumours and such to be removed before cover can be offered but doctors are often saying there is no need to remove them as they’re of no concern, this leaves the client in a very difficult position.
“And this is likely to get worse as diagnostic medical science continues to improve. I believe this is something the industry needs to look at or it is going to risk excluding a large cohort of potential customers.”
Reflexive underwriting
Insurers are reporting some encouraging trends.
Royal London chief underwriter Craig Paterson revealed more GP reports are being returned digitally than ever before and there were elements of digital assessment to allow human underwriters to focus their attention on more complex disclosures.
Paterson added the latest development the mutual is working on is around the use of reflexive underwriting rules where customers notify the insurer of changes to their application form answers after submission.
“This means we can assess these changes quicker and minimise interruption to the journey, giving customers peace of mind and cover quicker,” he said.
“Increases in post-issue sampling and product developments such as Underwrite Later are also helping customers get cover immediately, with the underwriting then taking place when the policy is in force at a more convenient time for the customer.”
Quicker turnaround times
According to Robert Morrison, chief underwriting officer at Aviva Health and Protection, giving a quick and accurate decision remains a key principle of the insurer’s underwriting strategy.
“Almost 84% of customers applying in January received their decision instantly through our automated rules engine,” Morrison revealed.
“When a customer has a complex medical history and a GP report is required, we’ll always attempt to request this digitally.
“Aviva has long been an advocate for the adoption of this digital technology and we now receive around 50% of reports through this mechanism.
“The quicker turnaround times and quality of information provided substantially improves the underwriting end-to-end time with more than half of digital reports returned within 10 days.”
Morrison noted that encryption techniques help to ensure that customers’ highly sensitive medical information remains fully protected and that the insurer is working with the Association of British Insurers and other stakeholders to increase the usage of digital medical reporting.
And according to Paul Yates, product strategy director at IPipeline, smart, rules based underwriting platforms have increased straight through processing rates, improved efficiency and have had a positive impact on reinsurance rates for providers.
“However, these gains are yet to be realised earlier in the buying process; realised before a recommendation is made or an application route chosen,” Yates continued.
“Technology has the power to connect the disconnected and fuse the currently distinct quote, research and underwriting phases of the buying journey, making it a more efficient journey for all – from straight through cases to those where loadings or exclusions will be transparent earlier.”
Insurers are listening
But ultimately the real key to improving underwriting processes will be as a result of advisers and insurers working together on behalf of the customer.
As one example, Emma Astley, managing director at Cover My Bubble, noted insurers were willing to listen to adviser feedback through increased use of e-signatures over wet signatures.
“They’re making changes because they know that they need to improve on stuff like this,” she added.