How innovation has changed underwriting

This article is part of
Guide to the evolution of underwriting

How innovation has changed underwriting
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Many advisers insist that innovation leading to faster underwriting is the key to growing the individual protection market because online shopping generally has driven a customer demand for instant gratification and a personalised experience.

Steve Baldry, director of underwriting at UnderwriteMe, says: “I believe the protection buying process is no different. 

“This consumer need has driven the requirement for insurers to provide customers with immediate online insurance decisions backed up by seamless, speedy processes.”

Industry portals can now offer limited underwriting questions and individual insurers have invested hugely in platforms to ensure they can provide as many immediate online point-of-sale decisions as possible.

For example, Legal and General reports it is able to give these on 83 per cent of life and critical illness applications and 80 per cent of income protection applications. 

But, while no one denies that underwriting innovation is valuable, not everyone thinks it is the be-all and end-all for achieving market growth.      

Robert Morrison, global chief underwriter, health and protection at Aviva, says: “Remember that we start from a strong position of around 70 per cent to 80 per cent of protection customers industry wide getting an instant decision, so I don’t know if I agree that faster underwriting will grow the market. 

"I think it’s more about trust in our products and people knowing they will do what they say they do.

“So, I think the claims statistics that insurers issue are just as important as underwriting innovation because we are selling a promise and not something tangible like an iPhone or Sky Sports package which always gives you something back."        

Industry reputation

Trust is not something that technology is necessarily likely to advance, although innovation to make life easier for consumers and advisers during lockdown has certainly not done the reputation of protection insurers any harm. 

For example, insurers have been giving many individuals access to insurance they may otherwise have struggled to obtain by offering virtual medical screenings with nurses.   

David Banks, underwriting and claims director at Legal and General, says: “Since the roll-out last October we have carried out over 1,500 remote screenings and we are currently working on further improvements that will allow the functionality to be extended.”

Some insurers have been offering the ability for the adviser to ‘delegate’ underwriting to the customer – by sending them a link so they can complete health and activities questions in their own time – whilst others have been accepting electronic trust forms without requiring them to be followed up with a wet signature copy.  

However, the biggest barrier to significantly increasing the number of protection policies that can be instantly underwritten still remains. 

Alan Lakey, director of CIExpert, says: “The inability to gain electronic access to medical records remains a huge problem, particularly given lockdown.