F&TRC's Ian McKenna analyses Royal London's online indicative underwriting decisions tool and why it might benefit both advisers and paraplanners.
When providing advice on protection cases where a loading may be expected it's important to be able to give the client a realistic indication of the likely premium as soon as possible.
FCA Treating Customers Fairly regulations require that "Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale"; identifying potential ratings looks like exactly what the regulator has in mind.
There have been significant advances in online underwriting with new services launched in the last couple of years.
iPipeline's XRAE allows far more pre-underwriting information to be provided for indicative terms and IRESS Exchange does now include expected BMI terms for a number of insurers.
UnderwriteMe do allow advisers to process applications with greater certainty but their coverage is still some way short of including all insurers.
Where further underwriting is required, advisers can submit an application with just the detail on the underwriting issue, but this still means starting a proposal.
Insurers field thousands of pre-sale underwriting calls to their call centres each month.
But what do you do if you are trying to process the case outside office hours or you'd rather not spend time on the phone?
Some insurers make PDFs available indicating their underwriting approach, but this is a long way from user-friendly for advisers.
Recognising this need, Royal London have created a new online indicative underwriting decisions tool.
It can be accessed by advisers 24 hours a day, seven days a week to get an indication of terms for cases requiring underwriting disclosure.
Users can access the pre-underwriting tool with existing Royal London online credentials, i.e. user ID and password or Unipass.
Alternatively new users can also create a guest account, which will be valid for seven days, or 25 completed cases if that happens sooner.
This means if you're not registered for digital access with Royal London you can still use the service straight away and subsequently obtain long-term credentials.
As any new online proposition should the service uses responsive design so it works easily on tablets and smartphones as well as PC.
The user interface is clear and makes good use of buttons and icons wherever possible to minimise data entry.
Royal London tell me they see the service being used by para-planners preparing cases for adviser meetings as well as by advisers themselves.
On entry the service initially asks for the client's age, gender, smoker status and cover required.
Life, Critical Illness, Life or Critical Illness, Income Protection and Waiver of Premium options are provided.
If appropriate users are asked to choose between an own occupation or working tasks definition for total permanent disability.
The next page asks which indicative terms are needed with options to then explore a range of questions medical, occupation, family history, pastimes, height and weight, i.e. BMI, smoking, alcohol and routine medical limits.
The system will then generate the appropriate questions and as data is entered it moves to the next unanswered question which is then initially highlighted in orange.
Once the necessary information has been entered the system comes back with a decision, which can be provided for each product type.
With data protection issues in mind the system is designed to not capture anything that would identify the individual, however users are provided with an underwriting indication and a reference that can be used to link the data to a subsequent proposal.
Once users have the decision they can then add a cover amount to see if any underwriting limits will apply.
The system will also show if any evidence will be needed. At this point there is the option to add occupation details either just stating the job title or, if desired, populating a full occupation assessment.
Using it on an iPhone 7 Plus I found this service really easy to use and a very effective way to get information quickly.
Personally I would like to see the system provide a summary of the information back to the adviser and perhaps some way for them to send it as a secure message for their compliance file.
These would be welcome enhancements but even without them it has a great deal to offer advisers and could be invaluable if you want to give terms to a client in a hurry.
In a perfect world the new underwriting tools being built by independent organisations would contain all this information for all insurers, but we don't live in a perfect world.
This is a quick and convenient way to get accurate underwriting information in a few minutes wherever you are whatever the time of day, or night!
Ian McKenna is director of the Finance & Technology Research Centre
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