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Adviser slams HIV cover rates

Medical financial advice specialist Unusual Risks has accused life insurance providers of failing to properly consider business from HIV sufferers.

Unusual Risks surveyed the 12 biggest life insurance providers in the UK and four – Prudential, Fortis, Zurich and Scottish Provident – were willing to write life insurance business for people with HIV. But marketing manager Chris Morgan says only Prudential offered competitive prices.

Morgan says a test case, described as the healthiest client with HIV the firm had represented, was rejected by Fortis and Scottish Provident. Zurich offered life insurance cover on a premium of £10 per £1,000 while Prudential quoted £5 per £1,000. He says: “It is a totally ridiculous situation, it just does not make sense. Zurich did not sit down and look at the actual risk presented by this client whatsoever. What you have got is companies coming to the market on a pot shot, trying to take a bit of the market and get some claim experience at the expense of the client.”

Zurich UK Life underwriting and claims director Phil Brown says: “The insurability of HIV-positive customers is still in its infancy and as such our position is to continue to assess each applicant on their own merits, considering the many aspects of risk involved.”

A Fortis spokesman says: “We do not automatically exclude cover for customers with any pre-existing conditions. We assess every case on a range of factors in arriving at decisions on whether terms can be offered.”

Scottish Provident head of underwriting and claims Phil Stafford says: “We are most likely to offer rated terms where the customer has undetectably low viral load, has had a consistently high CD4 count, good compliance with anti-viral treatment and has an insurance need of 10 years or less.”

Aegon does consider business from HIV sufferers but Morgan says he was told by its adviser line that this was not the case.


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. life insurers aren’t obliged to insure everone who sends them a prop. When life copanies think they can write business on these people profitably then they will do.

  2. How Chris Morgan can denigrate what Zurich have done seems absurd in light of the fact that they were 1 of only 2 companies who did offer terms. Surely providing terms and then letting the client assess the affordability of the cover is better than declining the client outright.

  3. Lets get this in perspective – 86500 people with HIV in the UK, 22500 dont know they have it.

    Of the 64000 who do circa, 1/3 will be at a stage of being uninsurable. Of the 42600 remaining circa 14000 will originate from Africa and will have limited need or demand for insurance products. Similarly the insurance needs of the remaining 28000, the majorityof whom are gay men, will be limited because of their personal circumstances. Add in the usual socio-economic overlay that impacts on the purchasing of insurance products and we are probably looking at at total market size here of 15000 to 20000.

    Then add in the cost of underwriting these applications – at least £200 – and the completion rates of lives rated at this level <50% and you can see that this is:
    - hardly core business for most mainstream insurers
    - unlikely to be profitable because of the high expense, low completion and lapse issues
    - will never provide sufficient volume of claims to give any comfort around long term survival rates

    It is niche business to most insurers and whilst they will consider applications from HIV+ customers they are never going to fall over themselves to do so on cut throat terms.

  4. I agree with Chris Morgan’s comments completely. HIV+ consumers find it extremely frustrating to get life cover mainly due to the life insurer’s internal processes. Personally I think that the insurance companies have not thought out their processes well enough to deal with the more complex underwriting that needs to be carried out. Targeted reports take forever to get completed mainly due to Medicals Direct’s sub standard processes.

    More frustrating though is that consumers cannot even get an approximate price prior to applying. All clients are loaded between £3 per mille – £9 per mille but in all honesty most are declined usually due to another condition (usually depression). I would be depressed if I were diagnosed. Ultimately consumers do not find out the premium until they have been offered terms.

    What is really dissapointing is that the underwriting takes such a long time that by the time the decision to insure is made the applicant has become very frustrated by the process. To then be told that they have been declined or loaded to an unnafordable premium is very disheartening to say the least.

    I have spoken to Hanover Re (PruProtect’s Re Insurer) to learn more about their thinking and they are quite open and honest about the product. It is clear that they need more data from consumers applying to offer better terms, but at least they are trying to offer cover.

    Most of our clients are African and I can assure you that they do have a need for insurance…why would they not? Many have kids that are not HIV+ and therefore have a bigger and more urgent need to leave them something.

    I am hoping that over time the offerings out there will be come more varied so that consumers have more options.

  5. This is a pathetic stunt by Chris Morgan. I suppose he chooses HIV (over the hundeds of other terrible diseases) because AIDS is still an easy headline grabber.

    He might be smug about the free publicity, but it won’t surprise me if even less companies are willing to support him after this.

    Chris – a word to the wise – grow up! Attacking the insurance industry via the press won’t win you any friends.

    Hard working brokers can sell policies without attacking the industry. Why don’t you try advertising your company instead? It doesn’t cost that much…and your integrity remains intact.

    The only winners are the journalists – they can retire to the bar for an early beer because some sucker fed them a cheap headline.

    ps: people with HIV have been able to buy insurance for many years in the Lloyds market. The bottom line is not many are sold. This is because of low demand.

  6. James, I agree with your comments regarding processes but HIV is no different from many of the other significant illnesses that people suffer from. They too suffer from the delays that occur when acquiring evidence to assess their application and the disappointment in finding that they are declined or heavily loaded. And dont put the blame on Meds Direct – if they were performing outside of their service agreements then they would be punished by their clients.

    However, this again comes down to economics. Most large insurers have built their pricing and business models around servicing the bulk of their customers who can be assessed at point of sale or on readily available information. Focusing on the small proportion of applicants who are problematic and probably cost them money acquire is hardly a proposition that will win favour with their bosses and shareholders.

    In these situations intermediaries and applicants can take ownership of their situation by discussing the case up front with a sympathetic insurer to see if the case is insurable and what information is needed. The applicant can get copies of his medical records from his GP or specialist, mitigating the need for the insurer to spend time and money on requesting evidence. And, if you get offered terms then take them and don’t shop around unnecessarily, as this just add costs into the model and lessens the attractiveness of business from this sector.

    It just takes a bit more effort from all concerned on this sort of business, and not just from the insurers….

  7. Just to add to the above, as an ex PruProtect underwriter I can state that delays in being sent medical reports are nothing to do with Medicals Direct.

    James, regarding extra premiums, you DO already have your approximate price of £3 – £9pm, clever though we are as underwriters we don’t have a crystal ball, we need the medical reports to give an accurate rating, otherwise we wouldn’t be wasting time and money requesting it. It’s the same as any serious medical condition when you ring any underwriting helpline, we can only give a presales approximation of terms.

    I could say a lot more but as I don’t work for Pruprotect any more I don’t think I should, they can speak for their own experience.

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