'Yes and no': Are Covid underwriting changes reasonable?

Adam Saville
@AdSaville_COVER
22 September 2020

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Less than 30% of protection advisers said Covid-19 underwriting changes are ‘always reasonable’

Revealed as part of Alea Risk director Andrew Wibberley's keynote session at the COVER Claims & Underwriting Forum earlier today, a survey undertaken by COVER has shined a light on the impact of Covid-19 on access to insurance.

Tune in on demand

Answered by almost 100 protection advisers ahead of the virtual event, it shows that 68% have had clients who they believed have had underwriting decisions made due to pre-existing medical conditions that were different to those they were seeing before Covid - 32.2% said they hadn't.

Of those that said they had, 51% said it has affected less than 10% of their clients, 31% said 10-25% of clients have been impacted, 12% said it has influenced more than 50% of client decisions and 6% said for 25-50%.

Wibberley said: "There is a significant minority (12%) who said this is happening for more than half of their business. While there is a niche, with industry developments like signposting I think it is important to recognise it does materially affect some companies and we do need to consider that impact significantly."

Covid symptoms

More than half (51%) of advisers who took part in the survey said they have had different underwriting decisions made due to a client's disclosure of symptoms of or a history of Covid-19 (49% have not). Of those that said ‘yes' to this question, 53% said it had affected less than 10% of clients. A quarter of them have seen this impact 10-25% of clients, followed by 25-50% (13%) and 9% said it had affected more than 50% of clients.

Wibberley said in his presentation: "This is a reminder of the uncertainty facing anyone starting a protection application at the moment, and that there is this extra kink - something that could go wrong - in the journey."

Are decisions fair?

When asked if they thought the changes brought in as a result of Covid-19 have been reasonable, 27% of protection advisers said ‘yes, always' and 7% said ‘no', however as many as 66% said ‘yes and no - some have been reasonable some haven't'.

Wibberley said from speaking to advisers, the key things that he heard were "high-level negatives" and the challenges this has posed to the principles of underwriting. For example, that "we should be pooling risk more now than ever". More specifically, advisers mentioned that requirements under the Equality Act "have not changed" and evidence is needed around the decisions that are made. Pipeline business was also mentioned as a concern for some advisers that Andrew spoke to, while others questioned the logic of a blanket approach to underwriting applied by insurers and others cited lack of engagement as an issue. "There is a desire to be heard and a desire to know what is happening, both on a business level and a human level," Wibberley said.

The positives

By way of positives, advisers mentioned insurer innovation and the evolving methods of gaining medical evidence by some companies despite lockdown restrictions.

Thankfully, 83% of protection advisers said it has not made them less likely to recommend protection to clients, however 11% said it has done so for some clients and 6% said they had been put off advising on protection products completely.

More than half (51%) had have had claims experiences during the pandemic and, encouragingly, 93% said the experience was either as expected (56%) or better than expected (37%). However, as Andrew said during his presentation, attention needs to be paid to the 7% who said their claims experience has been worse than expected.

He said: "The impact of claims experiences is felt very quickly amongst advisers and protection distributors. Really impressively, in my opinion, with everything that's been going on, we should be proud of these claims statistics. That's not to underplay the 7% whose experience was worse than expected and no doubt every one of those advisers has their own story to tell."

If you missed Andrew's keynote presentation at the COVER Claims & Underwriting Forum earlier, you can watch it - and all the other sessions - on demand.