How open, fair and transparent is the industry when it comes to medical underwriting? – Insurer views – March Protection Forum Recap

“Over the last 10 or 15 years, there’s been very much a shift towards a lot of automation within underwriting. So there’s a lot more emphasis on trying to get automated decisions. But I think as insurers, we’re always trying to balance that with trying to still offer some form of bespoke underwriting for more sort of complex cases and serious issues.”

“Believe it or not, as underwriters, we don’t actually want to get medical evidence. I think there is sort of a perception that we like to get medical evidence. But from our point of view, I mean, A, it costs us a lot of money and B, it takes an awfully long time to get evidence and things like that, especially over the last couple of years turnaround times have gone up quite a lot. So we are trying to always look at ways to avoid getting medical evidence. Having said that, there are going to be situations where we will always need to get medical evidence. So looking at more serious conditions, maybe complex heart-related conditions, or that kind of thing, unfortunately, there isn’t really a way that we can get around getting medical evidence from GP’s.”

“I think the other thing that’s changed over the last 5 to 10 years is there’s now much more emphasis on us being, or at least we should be being, more open about why we’re making decisions and trying to explain the reasons behind why we’re making the decisions we are. And in most cases now we should be able to explain to the customer or to yourselves why things have been declined, rated or whatever it may be.”

“I think it’s also important to note that every insurer is different. Just because one insurer does one thing doesn’t necessarily mean that every insurer is going to do the same, which I appreciate makes it quite hard for you guys to know where to place the business and what to do. But like I say, every company is different and they will have different thresholds that they’re happy to accept or not accept.”

“And there’s also been a big movement on mental health as well, with a lot more people potentially getting standard rates, especially for life cover. But even now, more on IP, we’re being a lot more generous than maybe we were five years ago on that.”

“One thing that we find is often applicants don’t necessarily know some of the information and that’s when we then have to go to GP’s to get clarification. So trying to encourage your applicants to get the most up-to-date readings for things like blood pressure for example can really help us not get medical evidence. Some of the GP’s now are taking sort of 2 to 3 months to get a GP report back, which is really long.”

“A big part of my particular role is underwriting quality. And so we do a significant amount of post-issue sampling. So after policies have been accepted, we will collect consent at the application stage, and we have a programme that we will randomly or target sample of a lot of businesses, and we’re working together with the data science teams in trying to improve things like straight through rates and to look at whether there are characteristics from what we see at the moment that we can build predictive models on the top of.”

“We have the same issues in terms of we know the difficulties getting GP’s and medical evidence back when we ask for it and we do rely sometimes on customer-supplied evidence, but we have actually seen evidence of some of that being tampered with or altered in the process. So you know, that doesn’t make life any easier when that happens. So there’s there is a reasonably high level of misrepresentation in the industry and through post-issue sampling and re-underwriting at the claim stage and we do quite a bit of that.”

“The industry and vitality did a lot of work on mental health. And that seems to have been successful. Generally speaking, we’re seeing far more acceptance straight through acceptance for that kind of risk than we did in the past.”

“We try to be all-inclusive for everybody. And as I say, a lot of the philosophy is driven by conditions in the reinsurance manual, which again, will differ from company to company. So there will be a slightly different view of a heart condition, for example. Or it could be, you know, sometimes it comes down to individual medical officer opinion. A medical officer will take a slightly different view of a risk than another medical officer because of their experience in that in that particular area. So you do get those anomalies between companies. Although I would say in general, most insurers have a relatively similar approach to risk.”

“The medical reports are a particular issue. We’re seeing these huge reports, you know, 400, 500 pages, which adds an enormous amount of time to the processing.  We’re also seeing, I think it’s not such a priority for GP’s.”