Protection underwriting: Past, present & future

In the future I expect to see pre-underwritten, personally tailored products with buy-now prices marketed to people at key points in their lives via different types of technology. If that sounds far-fetched, all you really need is access to bank statements, health records, a friendly reinsurer and some clever tech. 

It is still early days; however, the revolution may not be too far away. For many an IFA still struggling with ongoing underwriting issues, this statement will no doubt be met with some scepticism.

But real time underwriting and comparison services that allow for ‘buy now’ prices, pay as you live insurance, new combined life and protection products, protection providers morphing into customer-centric service providers with a raft of added-value services.

We will shortly be seeing new products launch that should make things simpler for consumers with specific health conditions, to make it easier for them to buy cover. Emma Thomson

We will also see a potential solution to the rising cost and complexity of critical illness cover – and the notion of evolution, if not revolution just yet, becomes slightly more palatable.

Combined with rapid investment growth in insuretech across the globe and the brave new world actually isn’t that far away. 

Advancements also bring challenges. At a recent conference by reinsurer Gen Re, it was suggested by a medical expert that critical illness cover, as we know it, is becoming unsustainable due to the fact that genetic testing is becoming much more widespread and cheap.

There are already products online, marketed as gifts, allowing us to test for hundreds of conditions, including cancers, for around £200 in one blood test and be diagnosed within a few weeks and up to a decade before symptoms could appear.

This also raises obvious concerns for the future affordability of life insurance and the inevitable ‘genetic underclass’. A big subject, which probably merits an article of its own.

Two-speed world

For now, it’s safe to say we are in a two-speed world in financial services. Those galloping ahead with new technology and data insights, and those being left behind, grappling with the weight of unwieldy legacy systems.

Ian McKenna, director of the Finance & Technology Research Centre (F&TRC), says: “FinTech has not impacted the insurance industry just yet but it will later on this year. We have seen a number of organisations raising venture capital in 2016, and expect to see some really innovative solutions coming to market in the next couple of years.”