PRINT PAGE

Group income protection providers smarten up underwriting procedures to cater for senior executives

August 2008 News

Insurers have introduced changes to their group income protection (GIP) underwriting processes that aim to make it easier and faster for senior executives to go on risk.

One key change is the way insurers collect medical evidence from scheme members who are above the free cover limit. Legal & General, for example, recently announced the launch of a new underwriting process – ONEderwriting – which includes what it said is the first full teleunderwriting service for GIP schemes.

Members will either undergo a “big T” teleinterview where a nurse asks them for all their medical history details over the phone or a “little t” teleinterview where they fill in a normal paper application form and a nurse calls them if further information is required. L&G is also about to introduce an interactive electronic version of its application form which will “open up” further questions if the members answers “yes” to any questions.

L&G said that in the majority of cases no further medical evidence will be required, but where it is needed L&G will either ask for a copy of the individual’s company medical or arrange for a nurse screening at the individual’s home or office. It aims to underwrite 87% of cases without obtaining further medical evidence and to reach a decision within five working days.

Diane Buckley, managing director of group protection at L&G, said: “In a market that’s more used to medical underwriting taking anything up to two months, we have focused on not only speeding up the process to what will, in many cases, be less than five days, but also on making it as easy and convenient as possible.”

Meanwhile, Unum, which already looks at how individuals cope with illnesses as well as what conditions they may have had, is carrying out face-to-face interviews with senior executives to determine terms.

Andrew Potterton, Unum’s chief medical underwriter, said: “VIPs are very busy people and they don’t like filling in forms. Traditionally the completion rate has been low and a lot of executives are therefore underinsured. By sitting in front of the individual we can not only see if they really are healthy, but the individual will get the VIP treatment and terms can be issued more quickly because we don’t usually need further medical evidence.”

Another key change is that members of Unum and L&G schemes will only need to be underwritten once, even if their salary increases. Traditionally, insurers have only allowed salary increases of up to 10% without further underwriting, but Potterton said even those who need to double their level of cover will be able to do so.

“We found that for people working in the City, where their salary could include large bonuses, the traditional approach was insufficient,” he said.

L&G said many of its changes will also be applied to group life schemes, including the introduction of teleunderwriting, increasing non-medical limits and not automatically requesting GP reports for the under-45s.