One in five protection underwriting applications fail

Almost one in five insurance applications fail to proceed resulting in lost business for advisers, a survey of protection intermediaries suggests.

The survey, carried out by protection specialist technology company UnderwriteMe, found that advisers typically contact more than one insurer for indicative prices for almost 70 per cent of customers before making an application. Only 13 per cent make multiple applications to two or three insurers.

Still, advisers responded that fewer than half (47 per cent) of their applications are accepted at the point of sale with no change in price or terms. Where terms do change, 46 per cent of advisers contact other insurers. Overall, 19 per cent of applications do not proceed, adding costs to both advisers and insurers.

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According to UnderwriteMe, when advisers were asked to compare the current application process to buying motor or home insurance, almost 60% considered it to be worse or much worse.

The firm carried out the research to coincide with the launch of a new underwriting solution that it says provides a single process to compare underwritten terms, with medical questions at the quote stage followed by immediate online completion. This should result in far fewer applications being rejected.

Peter Chadborn, director and adviser at Plan Money, said: “Underwriting uncertainties have always been a fundamental part of the process for protection advice. The full degree of work cannot be quantified until the very end of the process, which is both costly and undesirable for client and advisor.”

Martin Werth, chief executive officer of UnderwriteMe, said: “We provide advisers with a fast and consistent way to compare underwritten prices and benefit features for their customers. They can make an informed recommendation knowing the real cost and benefit features of different insurer offerings, as well as the speed of the checkpoint process.”