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Just what the doctor ordered

In my experience, one of the biggest delays in the processing of any underwritten life or pension product invariably comes as a result of doctors processing medical information.

In central London, this became such a problem that it was standard procedure within my old firm to ask the client to arrange an appointment with their doctor in order to sit with them while they completed the private medical attendant&#39s report.

As long ago as November 1996, Origo identified in its Underwriting Process Review document ( that applications where additional medical information is required can take up to 50 per cent longer to reach the acceptance stage than clean applications. It would appear the medical profession represents a major barrier to the delivery of good customer service.

As the same document identified that nearly one in five life proposals require a private medical attendant&#39s report, anything that can be done to reduce these delays would offer considerable benefits both in cost reduction and quality of service.

To be fair, healing sick patients is obviously more important for doctors than filling in forms for insurance companies. If we are to persuade the medical profession to attend more promptly to requests for information, clearly the industry needs to do all it can to make responding to such requests as easy as it can for doctors.

From the beginning of January, a major step forward will be achieved with the introduction of a standard general practioner&#39s report by the ABI.

The ABI tells me that take-up of this is likely to be virtually unanimous. I must compliment those involved. Having recently spent many long days in meetings with insurers to agree underwriting questions for electronic product applications, I can confirm that getting a collection of insurers to agree on common questions is no small task.

If we could move the whole process of the general practitioner&#39s report into the 21st Century by requesting and collecting information electronically, the benefits would be so much greater.

With this in mind, I was greatly encouraged at the recent IFA UK exhibition in Edinburgh to hear from Peter Joyce of Abbey National Financial and Investment Services, which, along with Bar-

clays Life, Halifax Life, HSBC, Legal & General, NatWest Life, Scottish Equitable and Zurich, recently sponsored a feasibility report on the concept of an electronic GPR.

The document ( makes a strong case for the adoption of such services. If anything, I suspect the study understates the savings to be achieved through such an approach.

There are still some major challenges to be faced if we are to achieve all that such a service can offer. Clearly, as an industry, we need to persuade the medical profession to accept insurers&#39 confirmation that they are holding authority rather than actually providing it each time. This would be a similar step to the banks accepting the electronic direct debit and the DSS operating the electronic processing of APP forms for contracting-out purposes.

To achieve this, it may be necessary to indemnify doctors against occasions where, for whatever reason, that is not in fact the case. I understand from members of the e-GPR group that there are no know incidents of fraudulent attempts by a life office to obtain a medical report so, presumably, the insurance industry should not find it too difficult to come up with someone to underwrite such an indemnity.

The electronic new business systems now being rolled out represent the chance to radically cut costs within our industry. The biggest single challenge remains to convince the IFA market en masse to use these.

At the same time, I see it as essential that all other areas that can create friction-free trading should be treated as urgent. Given the dramatic cuts in IFA commission now being predicted over the next three years, if we cannot achieve equally dramatic cuts in the costs of doing business, the future in a world where 1 per cent margins apply across all products will look increasingly bleak.

It will only be possible to gain the full benefit of all the important work done in the last year once all the tasks in establishing new business can be completed electronically. Having created a mechanism for electronic submission of new applications, we now need to focus on the next weakest link – and there is a strong case for arguing that this is the medical profession.

In the case of underwriting, those offices which have a major interest in the protection market will probably see e-GPR as a greater priority.

The work on the New Business E-Commerce project has demonstrated that a small, focused group of insurers and others can deliver worthwhile results for the benefit of the whole community. Were it not for the efforts of those companies which were primarily focused on enabling electronic sales of bond products, the industry would not be in as strong a position to be moving quickly to deliver protection and pension contracts in the same way.

In my view, there is a very strong case for life companies to encourage Origo to press ahead with a small group of companies which have most to gain from these changes.

Electronic trading will not happen overnight in our industry but we all have strong commercial imperatives to motivate us to achieve this. The medical profession has less to gain than our industry from these changes, so the adoption of such tools, whenever they arrive, will inevitably take longer.

The report from BDS Solutions suggests it will take at least three years for the majority of GPs to use such services. The sooner we can start, the earlier we will benefit from the savings and the sooner our customers will receive a faster service.


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