As an industry, private medical insurance (PMI) providers and intermediaries have long worked closely together to put in place our own standards for ensuring that customers are treated fairly, even before Financial Services Authority regulation came along. So it comes as something of a shock to find that one topic – the sharing of claims information on SME schemes – seems suddenly to threaten that mutual co-operation and trust.
I’d like to share with you our views on this issue because we happen to believe that there is a very different perspective to consider. Moreover, one that stems not from the position of protecting commercial interests but rather that of protecting the interests of your very own customers.
It’s worth pointing out that around 70% of SMEs have less than 10 employees (most have less than five) and that’s reflected in our own SME book. So this issue is much more closely aligned to the individual end of the spectrum than it is to the large corporate end.
There’s often a presumption that transparency is always a good thing. Insurers have long argued that customers should disclose everything we need to know about a risk in order to provide the right terms at the right price.
Except that right now there’s a moratorium operating in relation to the disclosure of genetic tests that insurers themselves put in place (and recently extended to 2014). And nobody could argue that this is anything other than in the very best interests of consumers and certainly not in the best interests of insurers.
So why the genetic moratorium point? Because I want to dispel this myth that disclosing information is always appropriate and always to the advantage of customers, no matter the circumstances.
Let’s start with this old chestnut. If insurers are going to use “data protection” as some kind of catch-all excuse when all else fails, then I’d agree it is irrelevant. But if some of the claims data being sought moves into “medical confidentiality” territory, one of the key components of the Data Protection Act, then it is most certainly relevant.
Take the position with an individual policy. People tend to assume that the policyholder has a right to know everything that happens under their policy; after all they’re the ones paying the premium. But neither partner under a joint policy has any right whatsoever to know what the other is claiming for, no matter who is paying the premium. That right to confidentiality also extends to employees of SME schemes and, just as importantly, their family members. In this respect, SMEs are far closer in nature to individual business than they are to corporate.
In fact, comparing what insurers divulge under corporate schemes with that of SME schemes isn’t appropriate. Given the size of a corporate scheme, insurers can provide detailed claims information in a way that is totally anonymous and thus protects medical confidentiality. And, of course, there is one other key difference; the claims performance of a corporate scheme has a direct impact on its premium.