There is no doubt that protection underwriting processes remain under strain since the pandemic and this can have a knock-on effect breaking trust between advisers and clients.
Long waits for GP reports have caused the sector to seek alternative ways of speeding up these processes on behalf of customers, but a lack of resource is intensifying the problem as advisers note a shortage of underwriters.
Better underwriting technology is one source of hope but greater transparency is needed to alleviate customer concerns and support the advice profession.
Reducing the need for medical reports
“Insurers have been working to reduce the need for medical reports in recent years to help speed up the process, with Royal London being the latest to further improve their non-medical limits to reduce the need for evidence,“ Emma Thomson, head of protection development at Sesame Bankhall Group, tells Health & Protection.
But Thomson warns more needs to be done despite electronic GP use increasing, especially due to the pressures on the NHS.
“This has improved return rates, but significant numbers of surgeries have yet to adopt this, meaning applicants are still waiting weeks or months to get cover in some cases,” she continues.
“Insurers need to find more ways to offer cover without having to rely on GP reports.”
Underwriter shortage
Delays in obtaining GP reports combined with variations in efficiency among different medical practices, can be a source of frustration for clients and insurers.
“Streamlining this process is essential to expedite underwriting and improve the overall customer experience,“ LifeSearch chief marketing officer Justin Harper says.
“Moreover, there is room for improvement with the amount and complexity of statements needing to be read to clients completing applications over the phone, which can be lengthy and lead to customer frustration.“
Intensifying the problem has been the “noticeable” shortage of underwriters, according to Harper, who says this shortage is having a “tangible” impact on insurers and is further exacerbating the delays in processing applications.
For Alan Knowles, co-managing director at Cura Financial Services, a connected challenge insurers face is the increase of private and virtual medical appointments which patients choose not to share with their GPs.
“This reduces the value of a GP report as there could be no information on some of these appointments,“ Knowles points out.
Declines on a class basis
While acknowledging improvements made with underwriting certain conditions such as HIV, Moneysworth director Andrew Wilkinson maintains there has been a lack of improvement in some important areas especially where claims are declined on a ‘class’ basis.
“The purchasing process has got worse and longer for consumers living with rateable health conditions and for their advisers,“ Wilkinson tells Health & Protection.
“Presales especially is becoming more and more time intensive and problematic for advisers as insurers are making it increasingly difficult for advisers to comply with the Consumer Duty.
“Even basic necessities for advisers such as being able to get a market comparison which accurately reflects smoker or non-smoker and ex-smoker premium rates across the market has become difficult as insurers continue to offer only smoker and non-smoker rates on the quoting portals.“
Using workarounds
Providing a provider’s perspective, National Friendly head of underwriting and claims Duncan Reeves says there has been a continual focus to make the purchase process as “quick and painless“ for customers as possible.
“In particular, there’s a desire to reduce question sets and make automated rules engines increasingly efficient providing customers with instant application decisions,” he says.
And touching on pressures in the NHS, Reeves says most insurers are trying to be as flexible as possible.
“For us, this is about only requesting a GP report when it’s absolutely necessary and not just for comfort evidence,“ he continues.
“There are workarounds, such as underwriters speaking to customers directly, utilising specialist reports and making sure non-medical limits remain appropriate.”
Joanna Streames, owner of Velvet Mortgage and Insure, explains she has noticed some insurers simplifying their questions and time frames being adjusted to be made more reasonable in some areas.
“This is a big improvement and hopefully is the beginning of a trend in this direction,“ she continues.
“I think underwriting will become more automated hopefully with less manual underwriting, and more automation before getting to a human should speed things along.“
Meanwhile Sesame’s Thomson points to developments in delegate route options, where the insurer enables the adviser to send a link to the client to complete the application form themselves.
“This is time-saving for the adviser and reduces the potential non-disclosure risk caused by accidental keying errors, as it’s the client who is completing the information,“ Thomson says.
“It also enables the client to complete the application at a time that suits them. Aviva is the latest insurer to introduce this option.
“Given how time-poor mortgage advisers are at present due to the work involved arranging mortgages, this is a positive development and I hope other insurers will follow suit.“
Market choke point
IPipeline client distribution director Stephanie Hydon points to an ongoing drive to simplify and streamline the application and underwriting process to make the role of the adviser easier and more productive.
“The current lack of transparency of both process and result, together with the binary choices imposed on advisers leads to a market choke point,“ Hydon explains.
“This means advisers often aren’t as efficient and productive as they could be – trust is eroded with clients whose premiums or terms change after underwriting, or advisers waste client time by forcing them down a more cumbersome application route than is required for simple disclosures.
“The result is that protection advice isn’t as attractive as it should be to holistic advisers and those specialising in other advice sectors. Consequently, sales and clients covered will likely remain restricted, despite growing relevance and need.
“This increased productivity is also key to enabling us to support inroads into underserved markets for example, the self-employed and renters.“