UK: Income Protection Immediate Support Payments

In the UK an income protection insurer (British Friendly) is now offering to make 'immediate' support payments, albeit at the end of the waiting period, even if there is incomplete medical information. The new found flexibility looks a lot like formalising some sensible discretion on the part of claims managers. In truth, claims managers may be subjects to conflicts between a requirement to be thorough, and a requirement to meet the needs of a client that is in trouble - already disabled, and probably in need of funds.

You can imagine the situation: say, there's a diagnosis, that kind of diagnosis is rarely wrong, but there is a standard test / procedure to check, and for whatever reason, that is taking time. Discretion to pay may be exercised already, but creating a process makes the rules fair for all. So the company makes the payment, subject to a maximum, and with the requirement that should it turn out the claim isn't valid, then the money advanced can be recovered from a future claim (it is not immediately repayable, remember, this person is off work). Anyone who would like to let me know if they have had cases where such discretion has been exercised, please drop me a line.

Cancer Incidence and Survivability

The news on cancer is both good and bad. The long retreat of infectious disease as a cause of early death means that cancer is a far more likely disorder. Within that great trend there are other trends, national, and individual factors which affect risk. But this is the key from a recent article: 

"Given increasing incidence rates, the average lifetime risk of being diagnosed with cancer has increased from one in three to one in two. However, as incidence rates have increased, mortality rates have reduced, leading to better outcomes overall. The good news is that cancer survival rates are improving: for patients diagnosed during 2010-2011 in England and Wales, 46% of men and 54% of women are predicted to survive their cancer for 10 years or more. However, the cost challenge for critical illness insurers and reinsurers is likely to persist."

The article "Cancer and cost", by Aisling Kennedy, reports on the latest data on the incidence and risks of cancer, at The - and it is well worth a read. 

The implication for individual insurance programmes, I think, is that a good combination of trauma and income protection insurance is ideal. Trauma because it can deliver assistance even before the insured is too ill to work. Income protection because it can provide most of the funds to replace income for a long period of time. 

UK: Financial Capability Week

In the UK it is currently Financial Capcility Week (FinCap Week) which runs from the 13th - 19th of November. According to their website 'It celebrates, showcases and amplifies the work underway to improve financial capability and ultimately to improve financial wellbeing. The week is organised as part of the Financial Capability Strategy for the UK and aims to get more people talking about money.'


UK: Contesting non-contestability

Here is an interesting article from the specialist consultant Chris Pollard in the UK:

"There has been some industry debate (and polling) as to whether a non-contestability period should be implemented within UK life insurance. Non-contestability would prevent an insurer from investigating whether or not, a claimant provided correct application information after a specific period of time, perhaps five years from when the policy started. Some markets, notably the US, operate such a policy."

Pollard makes a case for no move to a mandatory non-contestability period. Along the way, it is interesting to contrast the UK's situation with that here in New Zealand. 


UK: Curbing the Cobra Effect

Michael Hollins at the UK's Financial Conduct Authority has this thoughtful article on the benefits of evaluating past policies to see how they performed. Starting with the example of 'the Cobra effect'. 

During the time of British colonial rule in India, the government was concerned about the number of venomous snakes in Delhi, so it offered a bounty for every dead cobra. Initially this proved a successful strategy, resulting in many dead cobras. 

However some of the more enterprising citizens realised they could breed cobras and derive an income from collecting bounties. When the government finally cottoned on, they scrapped the reward scheme and snake breeders proceeded to release the now-valueless cobras onto the streets. Delhi ended up with more snakes than before.

The British government’s spectacular misjudgement coined the term ‘cobra effect’ and illustrates an important point.

So reviews of past policies, to see just how many Cobra's they were, perhaps, responsible for, are worth doing, but rarely done. Hollins says this is because of reputation risk for the regulator, lack of salience (the past not appearing as novel or relevant as the exciting future, or current issues), and fear of litigation. Yet the UK's national audit office has published a recent report highlighting the value of these studies. 


How insurers support mental health initiatives

The Association of British Insurers' blogger Lauren Gow has this piece on their support for mental health day, and how workplace support is important and matters. Link

It is no surprise that insurers should get behind efforts to help raise awareness for mental health issues, and aim for more positive approaches to support and treatment - mental health disorders are a fast-growing and expensive category of claim. In New Zealand nib have been doing their bit too - with an activity to bring nature into the workplace for World Mental Health day on October 10. 

UK: Jane Austen features on 'the new ten'

Jane Austen features on the new ten pound note issued by the Bank of England. Link. This is a polymer note, new for the UK, but with security features familiar to New Zealanders. It is groundbreaking in other ways, too. Jane Austen's presence helps with gender equality, less obviously (for most of us) there are a series of raised dots, a mark developed in conjunction with the Royal National Institute for the Blind which identify the note for blind users of money.