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The road to protection that improves people’s lives


I was fascinated to hear Royal London is going ahead with its proposal for a life insurance policy just for diabetics. As owner of a firm that specialises in placing cover for clients with pre-existing conditions the news is very exciting.

From my experience, the most difficult cases to place are type 1 and type 2 diabetics with high/unknown HbA1c readings or other complications. HbA1c is a test used to measure the blood glucose levels of diabetics. I certainly think the new plan will have a place with the well controlled clients and I am intrigued to see if it will help these others.

This development is particularly interesting, as the industry needs innovation to prevent it becoming stagnant. There is a reason the Vitality Life model worked so well and established it as the second biggest provider in the protection intermediary market last year. Protection can be boring to talk about and the process can seem so long for consumers. Anything that makes it more accessible has to be a good thing.

That being said, I cannot help but feel disappointed this innovation is restricted to life cover. Over the years, we have spoken to thousands of customers with diabetes and it is very rare they cannot get cover on the standard market. Yes, the process can be a little painstaking with conversations about unknown HbA1c readings and other complications such as retinopathy, but we can arrange cover in most cases.

No doubt the policy will increase sales of life insurance to clients with diabetes mellitus but will this be because the plan has more attractive premiums or because it presents a great marketing opportunity to the four million people in the UK living with the condition?

This is a great piece of innovation from Royal London but I think the most profound change will be what it (or others) does with it next. For example, what about critical illness cover for diabetics?

With only three providers offering cover for the best of best cases (and one of those likely to stop by the end of the year) there is huge room for improvement. But who will be brave enough to make critical illness cover more accessible to the millions of people living with the condition?

And it does not need to stop there, of course. There are many other conditions that people can control and improve based on their lifestyle choice. I have had countless conversations with insurers over the years about offering cover to people with high BMIs and incentivising people to lose weight.

What about other conditions that can be improved by lifestyle and healthy living, like hypertension, cholesterol and HIV. Is this something Royal London may consider if its pilot diabetics policy is successful? Or will another insurer seize the opportunity first? Could the industry be around the corner to offering cover that improves people’s lives and thus reduces the need to claim on these plans? Time will tell. But I hope so.

Alan Knowles is owner of special risk experts Cura



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There are 2 comments at the moment, we would love to hear your opinion too.

  1. As a proposition developer, this is the direction I have been keen to see the market moving in for some years now. Vitality’s success has given great hope. Whilst the time for the tide to turn has tested every scrap of patience, I do believe a whole host of factors are now conspiring to facilitate an era of customer-centric innovation in protection which will be of great all-round benefit. Amongst these are advances in technology which make implementation of ideas once considered pipe-dreams now a commercially viable possibility. Fingers crossed, there will be plenty more developments coming up to excite Alan and the rest of us who care about protection.

  2. I hate it when I read twaddle like this. Critical Illness for people with diabetes. Hmmm let me think about this. Is this the condition that causes significantly higher incidence of coronary artery disease, stroke, renal failure, blindness and amputation? Aren’t they the major causes of claim for critical illness outside of cancer and MS? Sound like an attractive proposition to me (not)…

    Did the author do any research before writing this.

    One of the key risk indicators in diabetes is the persons insight into their condition and their level of control. Someone not knowing or being able to get their last HbA1c reading doesn’t give an underwriter confidence in the risk being presented.

    It will be interesting to see the design and pricing of the Royal London product. The idea isn’t new. There have been similar schemes in the past for both diabetes and epilepsy. The experience wasn’t great. The better risks were able to obtain better terms by applying conventionally. This left the scheme with only the riskier clients attracting heavy loadings or were uninsurable. Completion rates were low and underwriting costs high. The experience in other markets has been more successful and I hope that market conditions have changed sufficiently to make this a success.

    As for condition specific offerings. Most people with well controlled hypertension and hypercholesterolaemia should be able to obtain standard rates or close to it. So where is the need/demand for specific offerings?

    One day I will read something worthwhile in one of these pieces.

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