Why is diabetes an important topic within underwriting?
The number of people with diabetes in the UK is over 4.8 million, and in the UK it’s estimated to rise to 5.3 million by 2025 (Diabetes UK, 2022). This means that there is a vast and growing population who may struggle to get cover. One of the main things we strive for at National Friendly is fairness and inclusivity, and we believe some cover is better than none.
When you look at the number of people with diabetes, it means that the amount of data we have access to is larger than for many other conditions. This means we can be proactive and evolve our approach to how we underwrite diabetes more efficiently and effectively. We want to offer the best terms we can to all our potential members. When we look back in 5 years’ time we want to be able demonstrate we’ve made significant changes to the way we underwrite people with diabetes.
Do you think that we’ll reach a point where diabetics can have cover at standard rates (or your existing premium loadings will improve)?
The terms being offered to people with chronic conditions is always changing. With improving medication, enhanced technologies for monitoring and keeping symptoms under control, customers are developing a better understanding of their condition and how to manage it. It’s hard to say if terms will ever be offered at “standard rates”, but if we compare how the insurance industry was five years ago, we are certainly making progress. Diabetes, especially type 1, can attract a higher prevalence of auto-immune and cardiovascular risks. However, as we get older these risks do fade, and it is not unheard of to offer standard rates to older lives with type 2 diabetes applying for life insurance.
What changes could be made to improve the terms offered to diabetics?
One facet the industry could improve is the approach to diabetes on an individual case by case basis. Regularly, insurers will paint all cases with the same brush which, while providing a degree of consistency, doesn’t effectively consider the person behind the application, and appreciate that everyone is different. Applying this ‘one size fits’ all approach can often result in terms being offered that may not always be the most appropriate to the individual, the best suited, or even fair. That’s why at National Friendly we adopt a more human, personal touch, which is assessing each case on its own merits to match the exact risk profile of the individual.
How does National Friendly compare to the rest of the market in its approach to diabetes?
As well as the individual consideration for each member, we don’t require any medical evidence upfront for type 2 diabetics when someone applies for income protection. This approach means customers with diabetes could get income protection cover immediately. Diabetes is a serious medical condition and it can result in someone needing time off work at some point in their life, but the condition shouldn’t be used as a reason not to process applications in a timely manner or offer fair terms.