COVER Think Tank: Industry experts hold debate on the future of underwriting
Tele-underwriting is proving an effective tool in the battle against non-disclosure, according to guests at the latest COVER Think Tank.
Discussing the future of underwriting in the protection market, providers and intermediaries all agreed that compared to traditional paper application forms, clients who discuss issues with an underwriter over the telephone disclose far more health details.
"You have got to ask point of sale questions that customers can reasonably be expected to answer in front of their partner.
Teleunderwriting is often easier," said Peter Le Beau, managing director at Le Beau Visage.
Andrew Howe, business developer at Munich Re, agreed: "Providers who have adopted teleunderwriting are getting consistent results. There are challenges ahead and there is still work to be done, but tele-underwriting appears to be the way forward." Fears were raised, however, that tele-underwriting is being heralded as a panacea to the non-disclosure woes of providers when, in some cases, it fails in achieving its basic goal.
"I am concerned that providers are investing large sums of money in tele-underwriting and they end up using this service to collect information rather than actually underwriting," said Iain Mallon, head of protection at AXA.
Doubts were also voiced as to whether tele-underwriting may actually cause more problems than it solves due to the level of disclosure it requires.
"Because tele-underwriting generates so much disclosure, in some circumstances the need for medical evidence increases because clients are telling us so much," said Nicolette Bray, underwriting strategy manager at Friends Provident.
Mallon however dismissed such concerns, but did urge caution: "We have experienced increased levels of disclosure and had to ask for less medical evidence as a result.
This is definitely the best way forward but tele-underwriting is part of the mix and it is not the one big solution.
We should not put it on a pedestal only to be knocked off," he added.
Guests did reach consensus however that tele-underwriting, although limited, looks extremely promising.
"Tele-underwriting has a huge number of benefits, not least in terms of disclosure, but if we were to apply it to every customer in the market we would just grind to a halt and be back where we began," said Peter Hamilton, head of protection marketing at Friends Provident.
• For details of the round table debate, please see the Think Tank supplement free with this issue.
