As insurers begin to understand the long term effects of Covid-19 and the UK nears a decision over ‘booster’ jabs, vaccination status could “quite possibly” hold greater prominence in the protection market, either in the availability of cover, or the price of it, a Zurich executive has said.
Peter Hamilton, Zurich's market engagement head, told FTAdviser his firm does not currently ask about vaccinations and has no immediate plans to do so. “Though [we] wouldn’t rule it out”.
Recent reports suggested some insurers are beginning to ask for vaccination statuses as a condition to a life policy being granted.
L&G, for instance, said in scenarios where the impact of Covid-19 “is known to be life threatening”, applications for new cover are typically postponed for 12 months unless these customers can confirm whether or not they have had their required vaccine doses.
“For the vast majority of customers, it is unlikely to make a difference,” said Hamilton.
“For those customers whose medical history suggests they are already in a higher risk group, evidence of vaccination may mean a company is able to offer cover in what would otherwise be a borderline case.
“There remain questions as to the long term impact of the vaccines and whether ‘booster’ jabs will be offered or needed, for example. The situation is an evolving one, and it’s quite possible to conceive of a market where vaccination status has greater prominence, either in the availability of cover, or the price of it.”
Currently, vaccination status is not affecting the price of any of the UK’s life insurance products, but it is starting to affect accessibility of cover.
But for Alan Knowles, managing director at Cura Financial Services, it was not about restricting access but creating it.
He said: “It’s about increasing access for those who have been vaccinated. Some of the more cautious are asking about the vaccine to allow them to offer cover to more people."
Knowles used the example of Scottish Widows. “A few months ago, they wouldn't offer life insurance to someone if their price increase was over 150/200 per cent, which was the same with almost all insurers. An increase of more than 200 per cent suggests a more complicated condition like a heart condition, type 1 diabetes, or recent cancer.
“Now they are saying they can go to 350/400 per cent increases to help cover those same people, but only if they have had the vaccine. So without the vaccine question, those possible clients would still be unable to buy cover.”
He concluded: “To be clear, it’s the pandemic that has caused insurers to restrict access, not the vaccine. I know the vaccine point is causing much debate at insurer level though.”
He told FTAdviser the main area where insurers were still restricting their products with regards to Covid-19 was older lives.
“Especially if they’re older with a medical condition,” he added. “Asking about vaccines is helping some insurers open doors but not all, yet.”
When it comes to younger, clinically vulnerable demographics - such as those with AIDS - Knowles said “regardless of vaccine status” these groups still can’t get cover, or find it just as difficult.
“For example, someone with AIDS couldn’t buy life insurance pre-pandemic. Someone with HIV, however, can still buy cover and it’s no more expensive today than it was 18 months ago.”
No surprise
Adam Higgs, head of research at Protection Guru, isn’t surprised by the fact people’s vaccine statuses are impacting insurers’ underwriting decisions.
He highlighted statistics which show a person vaccinated against Covid-19 is less likely to become seriously ill than someone who is not vaccinated.
A Public Health England report published this month found two-thirds of under-50s who died with the delta variant were unvaccinated.
“As such, it is hardly surprising that some insurers might be more cautious when underwriting those with high sums assured or chronic conditions that have not been vaccinated,” said Higgs.
Some protection advisers are yet to encounter insurers restricting access to their products based on their vaccination status, but reckon the impact of them doing so could trigger hold ups.
“I’ve not encountered this so far,” said Alan Lakey, director of CIExpert. “It would certainly cause delays if they adopt this attitude."
Lakey added there will be some losers if vaccination status becomes essential insurer criteria, particularly for those unable to obtain vaccinations and others who choose not to have vaccinations.
"I’m also aware of many younger people who have elected to not be jabbed - plus we have a cohort of hoax believers.”
ruby.hinchliffe@ft.com
