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Data burden shifts to providers

Association of British Insurers’ guidance is expected to result in more insurers taking responsibility for data collection rather than relying on advisers.

The guidance, to be released before Christmas, will push for insurers to pay a proportion of claims which may otherwise be declined for non-disclosure. Sources say this is likely to boost protection sales by making products easier to sell.

Reinsurers are expected to offer more attractive terms of risk to insurers that collect data themselves, such as through tele-underwriting, because they have lower claims’ costs than firms which rely on advisers.

It is hoped the shift will motivate more advisers to sell protection because they will no longer be burdened with underwriting responsibilities or be liable for misrepresentations.

Munich Re director of client management Andrew Francis says: “We would consider differentiating the terms of risk depending on whether data collection is done by the insurer or the adviser.”

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