How future CI claims are dealt with over the next few years will dictate the market's sucess
Over a third of all critical illness (CI) policies currently in force have been taken out during the last 24 months.
Speaking at the COVER Forum in Manchester this month, Sue Wilkinson, regional product manager at Scottish Provident, revealed that 1.5 million of the four million CI contracts in place have been signed in just a two- year period.
According to Wilkinson, the way claims are dealt with over the next few years in relation to the sharp rise in sales will impact the market's success. With only four out of five claims being successful, it is the industry's duty to make sure policyholders understand their cover.
'Claims will make or break products in the minds of clients. The industry must move towards clarity and away from the smoke and mirrors of yesterday,' she said.
CI underwriting issues were put in the spotlight by another speaker at the Forum. Nick Kirwan, chairman of the ABI's CI Working Party, outlined the changes that were to be implemented to standard definitions of CI next year.
According to Kirwan, the move by the ABI to narrow cover for prostate cancer, rather than increase premiums was influenced by a vote taken at last year's COVER Forum. The majority of delegates believed a change in definition would help control claims following the Government's nationwide screening initiative.
Also speaking at the Forum, Paul Davies, managing director of Sun Life Financial of Canada, advised delegates they need to sell group protection from a different angle if they are to increase sales. 'Life cover needs to be sold as a benefit for the employee's family, rather than the employee themselves. Income protection should be sold for its rehabilitation benefits, not as an income. Let us show employers that protection is a benefit they cannot afford not to take out,' he said.
The issue of genetics and its future impact on insurance was discussed by Phil Cleverley, chief underwriter at GE Frankona Re. According to the reinsurer, 66% of IFAs are against the use of genetic data by insurers. Cleverly said insurers need to take a less aggressive approach and work with other bodies to find the right course of action. 'There needs to be more debate and research to justify the industry's approaches. Insurers need to be more transparent ' particularly with premiums. We need to move away from confrontation and work with the various bodies involved in this debate if we are to move forward,' he said.
