Underwriting and claims technologies and systems are moving fast. But what do IFAs want from the processes, and are they likely to see it? Paul Robertson investigates
“One thing we are looking at is a nurse summary report – we get hold of the GP’s medical report and summarise it for the insurer. This takes the hassle off insurers.”
Andrew Gething, managing director of Morgan Ash, is a little more cautious: “There is definitely more to go, but it can only be through good data. The problem is that we are not analysing data in order to remove GP reports. There is still an element of ‘We’ll take the clean lives and everything else is dirty and requires a GPR’ out there, but this is reducing. The focus has been on clean cases, which are quite slick now. We need to focus on the more tricky ones.”
Morgan Ash has recently addressed this with the introduction of supplementary interviews. Instead of waiting on a tardy GP for the results of any tests, for example, Morgan Ash would phone the client and go through a tailored interview on the subject – in effect, asking the client how the test went (see COVER’s news section this month).
A question of trust
On one issue, the two IFAs speak with one voice: both believe in writing protection into trust.
Hulme said: “The key thing for the industry is trusts. It is a major annoyance that supermarkets are selling protection and people are taking insurance out without understanding the implications of the probate process. Intermediary products sold into trust will stay on the provider’s books longer and will end up cheaper for the provider than selling direct. They also remove much of the risk of bad press from clients as they find problems getting a payout.”
Morris agrees, and sees a technological solution: “The one thing I would change if I could would be the automation around trusts. Because it doesn’t make anyone any money, it is an area that is really lagging behind. From an adviser’s point of view, we want to be able to run through the process as quickly as possible. It is not even that complex to do. Online forms tend to be cleaner and less fiddly. It would be best to move administration all online,” he adds.
There is actually little to discuss on this matter as for once, everyone would seem to be in agreement. Gething definitely expects the advisers to have their way: “We are certainly talking about this. It is quite basic to include it in the needs assessment and then to provide documentation.”
So much for underwriting, but what about the other end of the process – claims? Gething was downbeat on expectations of provider engagement in claims. He said: “The market is pretty flat and hostile to innovation as everyone is trying to cut costs. I see that it will end up with providers using third-party systems on a pay-per-play basis. It makes sense to have one system shared between multiple providers, where we can use best practice.”
Benton sees this as the new frontier: “I see claims as the next growth area in terms of automation, specifically in terms of early intervention and rehab, alongside much more professional claims handling. Providers know there is a need to change and that need is being supplied by companies such as ourselves. Most insurers cannot do this in-house.”
Richard Freeman, business development director at Medicals Direct, chipped in on this point. He points out that it is not the providers leading any changes: “There has been hardly any investment in claims by life offices and there is no appetite to invest in systems.”
In fact, Medicals Direct is giving providers claims systems on the basis that it would then contract to provide the services peripheral to it, such as nurses and systems. Interestingly, it is developing systems allowing clients, IFAs and reinsurers to all have the ability of tracking claims.
While this is all great stuff and what most advisers would want, Hulme made an excellent point, summing up a bugbear of many intermediaries: the claims process is also used as an underwriting event. He said: “If underwriting systems can accept the decision on the risk, then surely it can accept the decision on the claim.
“If firms take on risk on the basis of information, then they should be happy with the claim on the basis of the same information. You can’t have two assessment structures for the same thing. The insurers should dig deeper on underwriting and less on claims.”
This is one wish on the list that is unlikely to be fulfilled. As Gething pointed out: “It is the old question of whether to underwrite at the application or claims stage. Claims are a much smaller number, so it is easier to do it then. But in our view, you should really be underwriting upfront, doing a thorough job first. Unfortunately, it is cheaper not to do that and the world is driven on price.”
Ah well, plus ça change, plus c’est la même chose.
