This project was aimed at improving service levels, market reputation and underwriting profitability for a leading supplier of Life and Critical Illness cover. These policies were sold through IFAs under the insurer's own brand and, and under a different brand, through the branches of a major clearing bank.
During reinsurance negotiations, discussions with reinsurers indicated potential to improve the accuracy with which people disclose medical history. People do sometimes omit important information from proposals, either deliberately or by accident. Later on, turning down a claim for non-disclosure means distress for policyholder and insurer alike.
There is empirical evidence that if, instead of asking a proposer to fill in a form, there is a telephone interview with a suitably qualified nurse, then people may be less inclined to lie, and are certainly more likely to be complete and accurate in what they tell you. Follow up medical questions can also eliminate avoidable doctor's examinations, reducing the time taken to issue policies. That's very important when a mortgage offer is at stake, and cuts medical expenses for the insurer too.
We issued invitations to tender to established service providers, reviewed their services, evaluated their tenders and selected a supplier.
With the reinsurance tenders, price had been pretty much the driver. Here, we were equally concerned with the suppliers' track record, their ability to provide sufficient numbers of qualified personnel consistently, and their ability to fit seamlessly into the insurer's process.
A pilot was run on a statistically significant subset of cases, with the cooperation of selected IFAs. All applications still required a paper proposal form, and some were selected for interview afterwards. Underwriting was based on the interview, to evaluate the reduction in medical examinations and the improvement in time to issue policies. Afterwards, cases were evaluated to see when and why the underwriting decision might have been different, and whether any difference was significant.
At the time that we ended our engagement, the pilot was demonstrating the benefits that had been expected.