Your IndustryMay 19 2016

Overcoming barriers in unusual risk cases

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Overcoming barriers in unusual risk cases

Non-standard customers have more choice than ever before.

According to Jeff Woods, business development director for Sesame Bankhall Group, the market has changed considerably over the past 20 years.

He says this has proved to be helpful, as “there are more niche players in the market, manually underwriting business case by case.

“This means a non-standard customer has more choice than ever before.”

Charlie Campbell, protection and health policy adviser for the Association of British Insurers, explains: “The number of protection providers and products offering cover to people with so-called unusual or special risks is increasing.

“Availability has widened due to insurers looking at trends in mortality and morbidity across the population to gain a better understanding of the risks.”

Deepak Jobanputra, deputy chief executive of Vitality Life, agrees availability and choice are far more advantageous now, especially with the advances in medical technology and healthcare.

He says: “The market for consumers with health concerns is well served in the UK. Advancements in medical science which enable conditions to be well managed should be reflected in the cover available.

“Protection insurance is constantly evolving as a result.”

As Emma Thomson, life office relations director at LifeSearch, says: “Most protection policies are offered to clients with adverse risks, albeit to different degrees.

Continuous innovation and development in this area should be a focus for protection providers of all shapes and sizes Jeff Woods

“So there is a fair amount of choice for most consumers, as having a few health issues is not automatically a barrier to getting cover.”

Limit and cost

However, this availability and evolution is still limited in comparison to “standard risks”, Mr Woods says, and even among those insurers who do underwrite people with more peculiar occupations or those with adverse medical history, the costs can sometimes be eye-watering.

Mr Woods explains: “The main disadvantage is policies can be more expensive, which affects the affordability for the customer.

“This is unfortunately the nature of premiums and pricing for non-standard customers.”

Indeed, Ms Thomson agrees: “Some conditions, such as diabetes, can lead to high premiums and it is harder to get cover for critical illness and income protection.”

So what can be done to remove the cost disadvantage?

Some providers already go some way to helping people with certain conditions to get insurance, creating better underwriting processes to assess the level of risk attached to chronic but manageable conditions, such as certain types of diabetes.

Ms Thomson adds: “There are some planned initiatives to launch products specifically tailored to clients with certain health conditions that are being managed well, and I look forward to seeing these go live.”

Risky business

There is also work being done to help people with ‘risky’ occupations to get life insurance at standard or cheaper rates, as currently certain occupations put people at a disadvantage.

Many healthy and active people in the UK, whether they are firefighters, factory workers or police officers, are finding it harder - or more expensive - to get cover. This is despite some of these people being in peak physical condition.

There are other risky jobs that are less well known, such as sky-diving instructors. While it has been difficult for such people to get life insurance, given the nature of their occupations, this historic disadvantage is changing.

More people, in more jobs, can now get some form of cover - you just need to look around for those providers willing to consider a host of factors - such as the age and good health of the client - not just the occupation.

Andy Doran, protection underwriting philosophy manager for Aviva, explains: “The vast majority of occupations, including those considered ‘unusual’ - such as a professional surfer, for example - will be able to secure life insurance at standard rates.”

So which are the UK’s most deadly jobs? Based on the number of work-related deaths in the latest available statistics from the Health and Safety Executive (HSE), building and construction - not the military - has been the most deadly occupation.

Statistics from the HSE also revealed there were 1.7m working days lost in 2015 as a result of job-related illness in the UK construction industry alone.

Top five deadly professions

1. Builders

In 2012 to 2013, 39 builders died - most through falling from a great height. Figures slightly improved between 2014 and 2015, but even so there were 35 deaths recorded.

2. Farmers

Including workers in the forestry and fishing professions, there were 29 fatalities, five of which were caused by animals.

3. Refuse collectors

In 2012 to 2013, 10 people died on the job.

4. Garage workers

Eight people towards the end of 2013 had died after working in mechanics, garage working and car sales.

5. Estate agents

While this might not be considered a dangerous or risky occupation, four estate agents died at work in 2012 to 2013. A further 70 were seriously injured.

According to the HSE, the top five deadliest profession figures do not include the number of those people who died in road accidents while travelling to and from work.

The figures also do not include mining, which has traditionally been considered most risky, but because there are only three pits left in the UK, the death toll is proportionately smaller than others.

Construction industry

Source: HSE

But new products will help create a more even playing field for people in ‘risky’ occupations.

Sesame Bankhall Group’s Jeff Woods believes with innovation will come more flexibility and therefore reductions in premiums.

He says: “Continuous innovation and development in this area should be a focus for protection providers of all shapes and sizes.”