Prior to the emergence of the internet in the 1990s, the protection underwriting process involved information laboriously changing hands via fax and post.
But now, if there’s no need to obtain a GP report, advisers can take people through from the product recommendation phase to actually putting them on risk in a single session.
Peter Hamilton, head of market engagement at Zurich, says: “The move to electronic underwriting has made a huge difference and has meant instant decisions in the majority of cases.
“We take it for granted, but there are many markets in the world where it’s much less well developed.”
Another major historical landmark was the introduction of tele-underwriting in the mid-2000s.
By enabling medical questions to be handled in confidence via a phone call with a nurse or underwriter, this avoids the need for applicants to disclose sensitive personal information to their advisers – helping to combat non-disclosure.
Other more recent developments have tended to constitute stepping-stones rather than quantum leaps.
Eric Purdy, independent protection consultant, says: “The basic underwriting approach hasn’t really changed over the past decade or so, as it’s still about looking at the likelihood of someone dying or becoming ill during the lifetime of the contract.
“But we are seeing that longevity has stopped improving as a result of lifestyle changes reducing life expectancies.”
There has, however, undoubtedly been a gradual evolution in the transparency of the underwriting process.
The origins of this can arguably be traced back to when protection insurers started publishing their claims statistics some 15 years ago, but the main push has been more recent.
Anna Rogers, head of underwriting and claims at LV, says: “During the last five years the industry has been very proactive in showing exactly what we do. The underwriting process had been largely unknown to advisers, and it was quite hard for them to find out why customers received adverse claims decisions.
“But we realised we needed to do more to earn the trust of advisers and consumers, so underwriters are now sharing guides with them, which really helps to set expectations. Industry standards, like the ABI’s recent standards on mental health, have also been useful.”
Better decision making
Pre-underwriting tools launched by the likes of LV, Royal London, Scottish Widows and – most recently, this January – by Zurich, have also helped manage customer expectations by allowing advisers to obtain an initial indication of the terms that non-standard health risks might be expected to receive post-underwriting.
Hamilton says: “Where information is not available, our new tool enables advisers to skip questions, and standard assumptions are applied, speeding up the application process.
“All pre-application indicative decisions are saved in a dashboard with a unique reference number, enabling advisers to revisit and edit cases later as well as using the reference to help identify the case if they wish to discuss it with an underwriter.”