As the protection market becomes increasingly competitive, underwriting is gathering importance as a key differentiating factor for advisers when choosing a provider.
A critical factor is the ease and speed with which the provider is able to underwrite their client's case. IFAs rate quality of service in the same league as competitive rates and commission. An integral part of the IFA service is the quality of the underwriting team and the service it provides.
Many IFAs may have been frustrated when dealing with a traditional underwriting department. As underwriting refers to a very personal aspect of a client – their health and family history of health, the way that underwriting is handled from the provider and IFA perspective can often be critical to the IFA/client relationship.
It is important for advisers to be aware they can play an important role in helping the underwriting process. There are three principal ways in which this can happen. The central theme is greater information flow between both sides – which will ultimately benefit the consumer.
First – point-of-sale questionnaires being completed alongside standard application forms. These questionnaires are generally linked to medical conditions and pursuits, such as diabetes or dangerous sports. Industrywide statistics suggest that, in 85 per cent of cases, where POS questionnaires are included with the application, cases are accepted without the need for a GP's report. Most advisers are aware it is often the need for referring on for further medical evidence that can slow up the process. Online applications make it easier still for advisers. Intuitive systems prompt advisers to answer additional questions where required.
Disclosure of medical and other underwriting information, such as lifestyle details is another key area where advisers can help the underwriting process. It cannot be emphasised enough how important it is for advisers to encourage their clients to be frank and open. The more information an underwriter has at his disposal at the time of application, the easier it is to make a quick and well informed decision.
If the adviser is in any doubt, it is far better to include more rather than less information. Some companies have worked towards helping IFAs understand how they can persuade clients to be up front when disclosing medical information. Not disclosing can result in a claim being unpaid.
Third, and possibly to help achieve both of the above, advisers should make more use of the advice flows from providers. Many providers offer underwriting helplines, email information services and a wealth of literature support to guide advisers in areas where they may be uncertain. The rule of thumb here is, if in doubt, refer to the provider and at all costs avoid making value judgements.
Matt Rann is head of underwriting and claims at Scottish Equitable