Andrew Wibberley: A month in underwriting

As someone lucky enough to write about the last decade in underwriting for COVER at the end of 2019, I'm relieved I've not been asked to summarise everything that's happened in the last 30 days! 

If on 1 April someone had said that by the end of the month insurers would have made all the pragmatic and innovative changes they have then I'd have waited for the "April Fool" cry to crush my optimistic hopes.

Today, my main concern writing this article is that it will be out of date by the time it's read because of the next positive change an insurer has made to medical evidence collection, approach to front line workers or premium holidays. 

A month ago

This feels a different place to the real concerns a month ago when some insurers had just said they would not request GP reports (GPRs) and strict questions were being introduced around COVID-19 exposure. At that point it appeared the momentum was heading towards a significantly more restricted service for anyone not in perfect health wanting insurance through the uncertain period ahead.

This has been the first time that something that significantly affects risk has hit since insurers really have the ability to react quickly by amending online questions rather than putting Tippex onto paper application forms.

The ability to change underwriting questions instantly is impressive - but then raises expectations that everything else will be done in similar lightning speed. Some other things require more thought, have more moving parts, or are buried deep in systems that haven't had the benefit of the investment that underwriting engines have had over the last decade.

Genuine innovation

We can now see emerging what so many people in insurers and reinsurers have been busy with whilst also adjusting to home working and their personal situations. There has been genuine innovation around medical screenings, blood tests and video screening that has enabled insurers to keep the door open to people applying for cover at this time. 

There has been pragmatism to the individual circumstances of applicants and policyholders and flexibility to find a way to get appropriate evidence - not to be constrained by what's always been done, or what the best way to do it would be.  Equally there is realism from advisers who understand that there are some applicants that can't be treated the same way they were six months ago - whether because of sum assured or specific medical disclosures.

Adaptability

There has been an adaptability to change approach based on the situation as it stands today, and not to stick to the approach that seemed to make sense last week. Insurers have looked to open up doors and reconsidered decisions that had been made as new facts emerge - this is to be applauded whenever it occurs, notably around obtaining GPRs.

The collaborative work done by the COVID-19 Actuary Response Group has shone out through this.  The ongoing analysis by the likes of Stuart Macdonald, Matt Fletcher, Nicola Oliver and Daniel Ryan amongst others has shown what can be done when insurance experts put their skills together for the greater good.

Challenges ahead

There are more challenges ahead for all involved in protection. Most immediately insurers are turning their attention to the lapse risk from existing policyholders who may be struggling. There will also be nervousness around current applicants whose motivations for buying may be understandably shorter term than insurers' and advisers' business models are based on.

The long-term impact on people who have suffered from COVID-19 of all ages will not be fully understood for a long time to come. But as we work our way through this we can look more confidently to the future as individuals and as an industry knowing that we can do pretty amazing things when we really need to.

I still think that everyone could do with finding ways to talk to each other rather than the shouting or whispering that's gone on through some of this. I'll put my hands up and say I've been guilty of this and have learned from that. Looking ahead it would be great to find ways to have these conversations at a normal volume again - my door (Zoom) is always open if anyone wants a chat!

Many of us will now know people who have been affected by this or even have lost people they cared about - whether professionally like financial adviser Dean Mason or underwriting and operations expert Tim Creamer, or personally through relatives or friends. If ever there was a reminder of the value of what we do and the need for us to work together to get this right it comes to us loud and clear in those moments.

Andrew Wibberley is director of Alea Risk