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Cross the t’s

Tele-underwriting has been hailed as one of the successes in the protection industry in recent years but some advisers say different levels of service from different providers can be problematic.

CBK Colchester principal Peter Chadborn says it can be difficult to manage client expectations of the underwriting process because they differ so much from one provider to another.

He says: “On the one hand, tele-underwriting is great because it supports the advice process and helps to reduce non-disclosure but every company does it slightly differently. It is very frustrating and confusing for advisers and clients.”

Highclere Financial Services partner Alan Lakey says: “There is no consistency at all. All the approaches vary and all of them have their problems. I imagine there will be some commonality in the future where they will all use big T.”

Master Adviser IFA Roy McLoughlin agrees and says trying to get an answer from insurers as to which method they use can be difficult.

He adds: “It is definitely a problem for us. Some providers use online forms, some use paper applications, some use big T underwriting and some use small t. It is very confusing.”

There are two main types of tele-underwriting – small t and big T. With small t underwriting, the application form is completed with initial health questions answered by the applicant. Only basic information is given and if the provider needs to know more, then tele-underwriting kicks in.

With big T, little or no medical information is submitted other than basic personal information. All applicants are then interviewed by phone about their medical history.

The aim of both types of tele-underwriting is to save time and money for both advisers and providers and to reduce the incidence of non-disclosure.

But the processes used can differ in other ways too. Some companies use trained underwriters or nurses to ask the questions while others use customer service representatives who read from a script, which can lead to quite different customer experiences.

In addition, some providers outsource tele-underwriting to specialists such as MorganAsh and some conduct it in house. If it is done in house, providers often use their existing IT and call-centre systems which again means the customer experience will differ greatly.

MorganAsh says the way that tele-underwriting is employed by different companies is dependent on the cost/benefit analysis used and the IT capability available.

According to the specialist tele-underwriting firm, there are three stages that can be used to compare the progress of implementation across the industry.

Stage one is when the cost/benefit analysis for the use of tele-underwriting is only based on the reduction in the cost of medical evidence. These projects are generally little t and have reduced the need for GP reports and further medical evidence by between 50 and 70 per cent.

MorganAsh managing director Andrew Gething says Friends Provident, Aegon and Bright Grey are at this stage.

Aviva and Legal & General are at stage two where providers have expanded their cost/benefit analysis to include non-disclosure, potential claims and reinsurer discounts.

Usually, these providers will use the big T method for underwriting income protection and critical-illness insurance applications and a small t for life insurance.

Stage three which Bupa, Axa, Wesleyan and Shepherds Friendly have reached means they use big T underwriting for all of their products.

Gething believes providers will increasingly move towards big T where the interviews are conducted by nurses or underwriters. He believes that this will almost eliminate the need for GP reports.

He says: “A full nurse interview is better than a full GPR. There are still a proportion of people who just do not remember certain medical information so they will need a nurse visit, pharmacy screen or the nurse may need to ring the doctor. The last resort should be the GPR.”

The table above shows the various methods employed by providers at present but Chadborn says it would be helpful to have an online version of the table which is regularly updated.

Both MorganAsh and say they may be able to provide this service. is a website which is run by Origo and provides information to advisers about the e-commerce services and back-office systems that providers use.

Origo managing director Paul Pettitt says: “Information about tele-underwriting is not on our site at the moment but it would be quite possible to do it in the future. We could do it pretty quickly if enough advisers were interested.”

McLoughlin says this would be really helpful: “It is crying out for someone to clarify it. Insurance companies should be making it easier for us to find this information without having to contact each one.”


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