Ellipse has come into the group risk market with the aim of changing the methods of underwriting and customer service. What do you think could be reasonably changed about the current underwriting procedure?
Roy McLoughlin, Market Adviser IFA
The group risk market is arguably an area where take-up should have increased due to the psychological sea-change that we have experienced during the recent hard times.
Many employers, although struggling, have realised the duel importance of both staff retention and, perhaps surprisingly, attraction. As a result they are looking to advisers to help in this process. In this regard, employee benefits have perhaps become more appreciated than ever before.
However, against this positive background we have a group market place which although improved, is in the opinion of many advisers, chaotic and often quite embarrassing to explain away to clients. Renewals coming in three-six months after their due date and quotes which seem consistently incorrect are the two biggest causes of consternation.
The market is also very small and dominated by a few players, such that competition is welcome in a way in which the PMI industry a few years ago was dramatically changed for the better. As Independent financial advisers we must remember the clue is in the title!
Thus a new entrant should be warmly welcomed and if they can address the underwriting and customer service issues that undoubtedly exist then that’s a positive addition. This in turn will worry those existing providers and hopefully service across the sector will improve dramatically.
This would be particularly beneficial at a time when advisers will, with any luck, witness increased sales in such a potentially lucrative arena.
Andy Couchman, Bank House Communications
Ellipse’s promise to change underwriting and customer service is interesting, although I haven’t yet seen much detail. So, what’s wrong with group risk underwriting today?
Ask employers and their main demand would be for higher free cover limits, coupled with greater integration between their various group risk providers, more speed and consistency. In other words, a simpler life. But I hope that Ellipse will offer more than that.
As a sector there is much that can be done using technology. So, if an employee could see how much additional cover they could add without having to face an underwriter’s grilling, might they buy more cover (especially as employers are looking to switch more costs to their employees)? And, if underwriting is needed, why not use the web to keep the employee informed of progress.
If someone is not 100% healthy – and let’s face it, that’s probably all of us – can they be incentivised to improve their lifestyle?
Intelligent incentive-based underwriting could help. For example, the carrot of lower personal premiums or more cover if an employee makes positive lifestyle changes; so, more of a relationship rather than a one-hit process. And, given the fact that most people change employer at some stage, an automatic continuation option so that protection can go with them if they move jobs.
I’d like to see ‘free trial’ benefits too, say when people are promoted or have children.
In essence, I hope that Ellipse will make group risk underwriting become more of a marketing tool rather than simply a means of policing risk.
Bob Cheesewright, Zurich
As a recent entrant to the group risk market ourselves we recognise the importance of delivering a quality service proposition, not just competitive products.
Service excellence is a key element of our scheme and medical underwriting processes.
The ability to move effectively through the quote, on-risk and policy issues stages can no longer just be an aspiration for providers and intermediaries. It’s now a regulatory requirement.
Medical underwriting is a critical part of the process and can be a major cause of delay. Product design must strike the right balance between appropriate risk control and customer expectations, not least because the client’s most senior staff are involved.
We gave a lot of attention to process design and pioneered lifetime forward underwriting both for life cover and income protection. We also introduced a tele-underwriting facility as a user friendly way to collect information from members who require underwriting while clarifying any points which might arise. This has improved both the efficiency of the underwriting process and the quality of the customer journey.
Scheme underwriting effectiveness is about obtaining the right information in ways which are convenient for the intermediary and client. Systems certainly have a role to play but so do people. They must work together in enhancing the customer experience; the tools are an enabler to service excellence not a solution.
Zurich has chosen to phase its entry to the group risk market quoting only where we can deliver a proper service.
Ian Brown, Skandia
It is essential that all companies have a clean and clear process of underwriting to ensure that clients receive adequate cover and receive the appropriate support should they fall ill.
One of the most distressing reasons for not receiving a payout is due to non-disclosure of historical conditions on the application form and a good underwriting system can help eliminate this possibility. Non-disclosure is very rarely deliberate by the adviser or client and ensuring that application forms are as clear as possible will enable advisers and clients to provide all the necessary facts.
Skandia provides advisers with direct access to senior underwriters, a system that bypasses underwriting “help-lines” staffed by administrators and allows for quick and accurate information exchange. In part due to this service, Skandia’s latest critical illness and death claims (to July 2009) show that it has paid out 92% of critical illness claims made so far this year with no claims turned down due to non-disclosure.
By offering a help-line, online support and a thorough medical disclosure form, Skandia helps policyholders and advisers disclose as much information as possible to ensure the best possibility of a future claim being paid out.
Receiving a cheque against a claim is what any client expects and as a provider we have the duty to ensure that the vast majority of claims made on our policies are successful.
Communication is essential to providing cohesive underwriting and good customer service.
