There is an important aspect of diversity and inclusion which is under the radar and requires focus for the industry – the plight of so many people living with health conditions who find that insurers do not want to insure them.
A huge contingent of the UK population is living and often working with certain long term health conditions which insurers will decline en masse for some types of protection cover.
The problem is worst in the individual income protection (IP) sector.
As an example, there are 1.4 million heart attack survivors in the UK. We think that 50%-60% of those of working age continue to work after their heart attack.
Despite the fact that many insurers will offer them long term life insurance our research indicates it is very difficult to obtain individual IP insurance from the same insurer.
So the comments made by the Financial Conduct Authority (FCA) about wanting to see products for a diverse range of consumers is absolutely key.
The regulator is saying there is a problem with some products, something Moneysworth has also previously said.
Inconsistent processes
We would like to see providers focussing on the differences in customer journeys between the quick straight through standard rates which go on risk instantly compared to the several months-long journey with uncertain outcome for many of those living with health conditions.
Contributing to this we have different insurers operating different processes and procedures.
Just consider the pre-underwriting processes at insurers.
Some operate a phone line to underwriters, although with some insurers in busy times these can be turned off, which causes further delays.
Even pre-pandemic this was a problem. More than one insurer ended-up with standard on hold times to speak with an underwriter running over 20 minutes for weeks and in one case this dragged on for months.
Some insurers will not even provide any telephone access, while others will not take email enquiries and insist their phone service is used instead.
We also have a couple of insurers who will not take phone or email enquiries to their underwriting department but insist the broker must use their pre-underwriting software.
Scope for customer detriment
So just to get around the whole market for indications on decline or offer and ratings for one client will take a lot of effort and in some cases it can run into hours, plus also waiting on average a few days to get all the email responses back.
It is a bit of an obstacle course to complete before we get to application stage.
When we get there, the outcomes between insurers both presale and after full underwriting vary hugely for the same cases.
For example, we regularly find the second cheapest company is charging 50% more premium than the cheapest and there is scope here for customer detriment.
Which means there will be a number of policyholders currently paying more for their protection insurance than they need to where a rated application was made without a full survey of the whole market.
So we think this is another aspect of diversity and inclusion which really needs some attention.
