“Around 30 per cent of income protection and critical illness policies end up with insurers writing off for GP reports, but you can wait six weeks for them to arrive.
"I’ve even had one case that took 18 months. But electronic access should be instantaneous and would revolutionise the whole application process.”
GP reports
At least there has been partial progress in this regard as some GPs have signed up to more limited electronic services that cut the wait for GP reports down to only two weeks, or even less in some cases.
Medi2data, a facilitator of such digital medical reports, estimates that around a quarter of GPs that insurers are contacting are currently using the approach.
More significantly, however, it predicts that the Holy Grail of instantaneous electronic underwriting could be just around the corner.
Richard Freeman, founder and chief executive of Medi2data, says: “We now have the capability to take data directly from GPs’ records and put them straight into an underwriting rules engine system, and hopefully we will be able to launch a same-day service by the end of this year.
"But the hurdle we must still overcome is gaining the confidence of GPs that the data will be handled appropriately.”
Underwriting later
Another hugely exciting potential development is the ability for people to take out protection policies instantly but have the underwriting done later.
This January Royal London launched such an option for the business protection and relevant life markets called Underwrite Later.
Policies are issued without underwriting but, as soon as the insurer has the necessary medical and other evidence (which can take up to six months), it can retrospectively impose additional terms and higher premiums.
If all goes well, Royal London intends to extend the approach to the individual protection market.
Zanele Sibanda, head of internal markets for Towergate Health and Protection, says: “I see Underwrite Later being a standard feature in the individual market in due course, and I think it’s a lot more viable than having a moratorium policy, which, as we have seen in the private medical insurance market, can lead to disputes at the claims stage.”
Cross-industry evolution
Innovation is most unlikely to stop there, either.
Eoin Lyons, chief executive of administration and technology provider OPAL, envisages a scenario in which, instead of advisers having to key in data, underwriting search engines will be able to take information from other sources like mortgage or rental applications or credit ratings.
