Underwriting has been identified as a particular pinch point for the protection sector, with industry professionals pointing to unprecedented backlogs of anything up to 47 days.
A shortage of underwriters has been highlighted as one of the key causes with this triggering difficulties for customers who do not go straight through.
This is being further exacerbated amid elongated processes, longer question formas and digital native clients who expect instant decisions.
According to Alan Lakey (pictured), director of CIExpert and Highclere Financial Services, protection advisers will have noticed the considerable increase to underwriting delays.
“This is partly due to GP reports taking longer to obtain but mainly because of the shortage of underwriters,” Lakey says.
“One insurer advised a backlog of 47 working days, which in my experience is unprecedented.”
More challenging process
Andy Walton, protection proposition director at Mortgage Advice Bureau, said navigating the protection market had been a mixed experience this year.
“While many have found customers receptive to protection products, the consensus on the single biggest pinch point is clear: underwriting complexity and delays,” Walton told Health & Protection.
But Walton added the process has become noticeably more challenging.
“This is particularly due to the residual effects of the pandemic,” he continued.
“Post-Covid, some providers have introduced more lengthy and detailed medical questioning, increasing the instances where a case cannot be processed instantly.
“On a positive note, providers are achieving near all-time high straight-through processing (STP) rates, with some reaching around 85% for customers with a clean bill of health.
“However, it’s the remaining 15% – the cases requiring further investigation, such as GP reports – that cause severe friction.
“The resultant delays in obtaining necessary medical information create significant additional administrative work for advisers, who are then tasked with chasing doctors and clients.
“This not only burdens their businesses but also delays policy approval, and in some instances, results in customers abandoning the process entirely.”
Nilesh Patel, chief revenue and customer officer at UnderwriteMe, reported that advisers increasingly have difficulty explaining medical underwriting to digitally native clients who expect instant decisions.
“Managing client expectations when medical evidence is required can be difficult and chasing medical evidence is an administrative burden,” Patel pointed out.
“The cost-of-living crisis makes protection insurance feel less affordable; clients are prioritising short-term expenses over long-term protection.”
