Time to Embrace Inclusive Insurance
The availability of Life and Protection cover for people living with certain serious health conditions in the UK is starting to become a critical issue for insurers. The public perception is that insurers simply don’t offer cover, or that it is difficult to source affordable, tailored cover.
In June last year, as we were still getting to grips with the global pandemic, I spoke on this subject at an event organised by the Society of Actuaries (SOA) in Ireland. This was partly because of my interest in the area at Gen Re, but also because I’m involved in a movement in the UK Life insurance market called the Access to Insurance Group.
An issue of growing importance
Access to insurance is an increasingly important issue because the number of people living with chronic medical conditions is on the rise. How we deal with these challenges as we emerge from the pandemic and its consequences is a crucial question for the Life insurance industry globally.
Conditions, such as high blood pressure and diabetes, are growing more prevalent among the population. The total number of people living with diabetes in the UK is around 4.9 million; it’s estimated that by 2030 that number will be 5.5 million or nearly 8% of the population.1
Thanks to advances in screening and treatment, cancer diagnoses and survival rates have also soared in recent decades around the world. By 2030 it is estimated that over 5% of the UK population will be living with a cancer diagnosis.2
It’s not only chronic physical conditions that are trending up: the number of people with mental health conditions is growing. In England, one-in-four people will experience a mental health problem of some kind each year.3 The cost of mental illness to the UK economy has been estimated at 4.5% of GDP.4
The difficulty that people with physical and mental health problems face when trying to access Life insurance is a challenge the insurance industry should rise to address. After all, many of these individuals are potential customers, still in employment and with protection needs.
It’s possible that we as an industry have underserved this sector, placing our focus on gaining process efficiencies through automation and rules-based underwriting. Whatever the reason, the public perception is that insurers don’t cover people with chronic conditions, or that it’s simply too difficult for them to source cover.
Building inclusive solutions
But cover is available, and many insurers and brokers have been working on solutions for many years. In the SOA Ireland webinar, we heard from Alan Knowles, who heads up the UK intermediary, Cura Insurance. Cura specialises in helping people with medical conditions who struggle to obtain the insurance they need.
He explained that high percentage loadings on Life cover have helped Cura secure cover for people with chronic conditions. Provision of Income Protection has improved, for people with diabetes (types 1 and 2) and also for those with HIV.
Alan said that Critical Illness cover is still hard to obtain in the UK for those with a serious complex condition diagnosis and that COVID‑19 has slowed progress on access to insurance as insurers have become more cautious of emerging risks.
Alan and I agree that the industry must work to maintain the momentum it has gained recently and to stay on the front foot. The alternative is to wait for regulators to step in and mandate change. But isn’t it preferable to develop our own solutions that widen access to insurance, rather than have measures forced on us?
We have seen in other markets that conditions that were previously regarded as uninsurable, or insurable only in a very restricted form, have now got wider access to cover. In South Africa, for example, Life insurers have responded to lobby pressure over the difficulties encountered by people diagnosed as HIV+ in obtaining Life insurance.
Collaboration is key
To overcome the uncertainties associated with widening access to insurance, the industry should seek more input from medical professionals. Data is key, it enables us to assess risk and, although it is a long process, we can accelerate our progress by collaborating with other stakeholders and interest groups.
In this way, we can develop specialist products just as South African insurers have for people with HIV+. In the UK, Gen Re already works with clients to offer tailored solutions for those with diabetes and those with severe mental illness. We are also talking to our clients about a framework for a new managed mental health product Gen Re has developed to provide better access to cover for people presenting with certain mental health conditions.
We should be striving for products that are as close to the standard protection as possible, without being shackled to that model. When we deviate from the standard, we should be able to demonstrate the benefit to the consumer in one of the following areas: improved customer experience, better coverage, or more affordable premiums.
We should also be prepared to review application procedures and recognise that a more sympathetic approach is needed if we are to gather the information needed to aid underwriting decisions.
Increasing access to insurance ought to be a big priority for all carriers today. It is the right thing to do from a societal point of view and it creates new opportunities for everyone. A new way of thinking is needed, but the challenges are not insurmountable.
Certainly, doing nothing is no longer an option.
Developments in Mental Health
Interested to hear more on this topic? We will be running a webinar for clients in the UK and Ireland on 24 August (15:00 GMT) on various aspects of mental health; from revisiting the ABI Standards to looking at a prototype for a managed mental health product developed by our South African colleagues. Invitations with details of how to register will be sent shortly, alternatively, don’t hesitate to get in touch with your usual Gen Re contact if you would like to attend.