The short answer is "a lot" but let's get stuck into the long answer.
Innovation and the customer experience are the order of the day. Modern life is getting faster, busier and more connected. The first two are pressures on our industry, but the third represents the opportunity for change. People don't have the time or the inclination to spend hours filling out forms or weeks waiting for underwriting decisions. With the help of technology, timescales can be dramatically reduced and the wider proposition can be made more relevant to the needs of the modern consumer. Ongoing evolution is vital if the UK's protection gap, estimated at £2.4tn, is ever going to shrink.
A huge amount of planning, experimenting and work has been going in to bringing the protection purchasing journey into the 21st century. One area of focus has been the underwriting process – the way in which medical information is gathered about an applicant to determine how much their policy should cost. Historically, this can take a month or more but it is now possible to have cover in place in 20 to 30 minutes for 90% of people.
This is down to two main changes. The first is simplifying the language of medical questionnaires so they relate to the real-life experiences of the people taking them. For example, asking how many glasses of wine or pints of beer someone drinks in a week instead of fixating on the number of units, or tweaking a "lifelong non-smoker" to someone who has simply "never smoked". These little changes may seem like mere quality of life adjustments on the surface, but making the flow better, less repetitive and easier to read, questionnaires can be cut down by over 40% and still provide all the information an insurer needs. This improved journey, with intuitive underwriting rules behind it, leads to over 80% of applicants getting their decision straight away, with the process taking around 20 minutes.
One area of focus has been the underwriting process – the way in which medical information is gathered about an applicant to determine how much their policy should cost. Historically, this can take a month or more but it is now possible to have cover in place in 20 to 30 minutes for 90% of people.
Looking at that remaining 20%, there are still ways to limit the number of cases which need referral for a GP Report (GPR), a traditional underwriting road block. It takes, on average, more than 30 days to get a GPR back with sufficient information to make an underwriting decision, which is far longer than someone trying to buy life insurance wants to wait. It is also a lot of extra work for insurers – have you ever tried to read a GP's handwriting?
Is it possible to obtain enough extra detail to make a decision about the applicant without putting them through the hassle of obtaining a GPR? For another 10% or so of customers, the answer is yes, by having an underwriter give them a call on the telephone, at a time when it is convenient for them. Underwriters have the knowledge and experience to ask carefully constructed questions which tease out the critical details which allow them to make a decision there and then. This call typically takes around 10 minutes and will lead to a decision within 24 hours. 90% of customers have a price in front of them no more than a day after they finished their application.
Relevance is another key consideration. Life insurance is a tough sell, particularly to younger customers who can get cover for a song. Instead of the usual methods of trying to scare potential customers or, worse, rationally explain why protection insurance might be a good idea, long decades of failing to get through to this demographic have started to get insurers thinking that something different might be needed – such as giving them something they do want attached to an insurance product. Quality policies bring a wealth of information on personal care issues. Their advice and guidance on health and wellbeing, diet, exercise and lifestyle are conveniently packaged, giving customers access to everything they need in their pocket. Magazine-style formats make finding relevant articles easy in customers' day-to-day lives.
The switch for many from physical, industrial jobs to desk-bound, screen-based working has shifted the risk factors in our working lives. The risk of physical strain or accident has given way to mental strain and fatigue. Feeling we're always on the go and required to be contactable 24/7 is taking its toll on our mental health.
The switch for many from physical, industrial jobs to desk-bound, screen-based working has shifted the risk factors in our working lives. The risk of physical strain or accident has given way to mental strain and fatigue.
Stress and mental health feature in the top five reasons for absence in the UK in 2016. 37% of stress and mental health issues stem from problems in our personal lives.
The implications are clear. Mental health issues:
- can make it harder to concentrate
- may cause us to take longer doing tasks or making decisions
- can reduce our patience when dealing with others
Instead of taking the lifeguard approach and rushing in to save people from drowning, we should be 'teaching them to swim' to help them avoid getting into trouble in the first place. Support services focused on health and lifestyle, along with responsible employment policies, can do just that.
That is a sample of the innovation and progress being made in the Individual Protection arena. Customer-focused product design and processes should continue to make it increasingly easy to make this purchase which is, ultimately, made with the head rather than the heart.