21st February 2024

NHS waiting lists have been severely exacerbated by the COVID-19 pandemic with nearly 7.6m people waiting for treatment in England.1 People waiting for treatment or investigations have traditionally struggled to get cover and this has resulted in a huge protection gap that needs solutions that challenge the status quo.

Understanding individual nuances offers an approach that is not about a blanket exclusion for the policy's duration. Instead, for a variety of conditions, temporary measures can be added that are reevaluated after an individual's treatment is complete. This marks an innovative departure from standard industry practices, which is something mutual society National Friendly are focusing on. 

"If someone has sprained an ankle and is awaiting treatment, for example, it seems innocuous and easy enough to get cover for it. However, many insurers will wait until the ankle has been treated or the individual has fully recovered before offering terms," explains John Fotheringham, Technical Lead Underwriter, National Friendly.  

"We take a pragmatic approach with individuals awaiting treatment. We're confident in our exclusions being robust enough to cover the risk. We're happy to accept a variety of these clients if they are awaiting treatment, given the potential NHS wait times," he says.  

"This is not an exclusion for the length of the policy, it's a temporary exclusion. This goes a long way to filling the protection gap that is only going to get wider with NHS waiting lists," Fotheringham adds.  

"As a mutual society, our goal is to look at each applicant as an individual; adopting a holistic, pragmatic and sensible approach to help cover individuals who have historically found it difficult to obtain cover."

Consumer Duty brings transparency 

Underwriting is a relatively technical arena, and the subject of exclusions can be particularly confusing for customers. Consumer Duty significantly shifts consumer protection to an outcome focused approach and sets higher expectations for standards of care. 

Fotheringham says it is important to explain exactly what exclusions will mean in a policy, because it's not always clear. 

"Providing customers and brokers with greater insight into how an exclusion might impact the policy can often help with tackling potential sales barriers. It's important that insurers are transparent about what the exclusions represent and what customers can and can't claim for. Offering quick access to experienced underwriters is key here, as we understand the time pressures brokers often find themselves under and the preference to speak with an underwriter who can provide clear and helpful on-the-spot advice," he says.  

Common sense underwriting 

Insurance is heavily focused on straight through processing, which promises shorter cycle times and better customer satisfaction. On the one hand, it allows providers to process cases without having to involve an underwriter; but on the other, it means that declinations can be rudimentary at times.  

Rules engines can be blunt tools when it comes to risk because they often don't capture the full picture. They are great at capturing basic information but without taking it a step further and engaging directly with customers the evolution and effectiveness of the engine can stagnate. Adapting engines quickly to reflect ever-changing customer requirements is essential.

"Having the ability to make instant changes to our rules engine without the need for multi departmental input allows us to adapt to market and medical developments or refine our risk appetite instantly. Feedback from key partners is especially welcomed here and is often the driver to implement changes and improvements," says Fotheringham. 

"We review and scrutinise every declinations and if there is an angle or route to cover, we prefer to contact the broker and perhaps speak to the client if the broker is open to it, and restart that important discussion to cover," he says.  

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