Torquil Clark Life insurance director, Jason King, has hit out at the insurance industry after discovering the extraordinary amount of paper used for online applications for life insurance.
He said this was due to a combination of factors. "The sheer volume of questions is down to insurers' demand for lower rates, so reinsurers have to make sure the underwriting is spot on. The other factors are the impact of regulation and the fear of the Financial Ombudsman Service and litigation."
King believed insurers should focus on the process of buying insurance, the price of their products and including a margin for error when designing their products. "There should also be industry guidelines on the percentage of cases insurers are allowed to rate or decline," he added.
The industry is shooting itself in the foot, King added. "It is very frustrating as consumers say they want to buy protection yet the industry seems intent on putting barriers in their way. The drop-out rate across the industry is over 20%, so we could instantly grow the number of people buying protection by a quarter if we could just get this right."
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