Partners Life: Underwriting for COVID-19 financial risks

Partners Life are remaining open to new business during this uncertain time of COVID-19 but have announced a number of restrictions to IP, MP, and TPD, while placing a minimum 6 month stand-down for eligibility for Premium Holiday and Policy Suspension claims. Stating ‘As soon as we are able to remove these restrictions for new business, we will contact those advisers and clients affected directly to review and/or remove these restrictions for any policies issued during this interim period.’

Here is more information:

  1. No new Loss of Revenue Cover or Variable Loss of Revenue Cover benefits will be issued. The cover will be deferred.
  2. No new Agreed Value benefits based on Income will be issued. This includes Income Covers, Mortgage Repayment and Household Expenses benefit which are to be based on income. Indemnity Loss of Earnings Income Cover will be offered as an alternative by way of Offer of Terms.
  3. MRC and HEC based on actual mortgage repayments and expenses will still be allowed.
  4. Disability benefits of any kind will have a Mental health exclusion applied by way of Offer of Terms. This includes lump sum benefits which cover disability such as TPD, Trauma Cover and Hybrid Business Benefits.
  5. Disability benefits of any kind will have a restriction for disability first arising while a life assured is unemployed or is on a period of leave without pay. This includes lump sum benefits which cover disability such as TPD, Trauma Cover and Hybrid Business Benefits.

    These lives assured will instead be considered an Occupation Class 5 immediately they stop work rather than after the usual 12 month period. This restriction will be achieved by way of an Offer of Terms.
  6. All new policies to be issued will include a minimum 6 month stand-down for eligibility for Premium Holiday and Policy Suspension claims. This restriction which will be achieved by way of Offer of Terms.

Reinsurers putting pressure on Life Insurers over vaping health risks

There are a number of global reinsurers putting pressure on underwriters to charge certain people who vape even more than they charge smokers, or to exclude them all together from getting cover. This is following that announcement that there were 47 vape related deaths in the US last year and global research is indicating that vaping is not good.

Click here to read more. 

Partners Life: Chief Underwriter

Partners Life have announced that Clayton Gardner will return to the role of Chief Underwriter after spending several years as Chief Technical Underwriter. 

Naomi writes 'I am personally delighted that Clayton will once again be the public face of underwriting at Partners Life, and I am sure the many advisers who have had the pleasure of dealing with Clayton over the years will be equally delighted. 
As one of Partners Life’s founding employees, Clayton has demonstrated a loyalty and commitment to the company which is second to none, and his agreement to step back into the Chief Underwriter role is further evidence of this commitment.'

Good to see: actively managing exclusions and loadings

nib has announced that from February they will pro-actively manage exclusions and loadings: 

We’re taking proactive steps by reviewing existing members policies’ exclusions and loadings

For nib, our purpose is our members’ better health. Up until now, nib has relied on our members or their adviser to seek a review of any exclusions or loadings that have been applied to their policy. Starting February 2020, nib is changing our business process to proactively contact members who have special terms on their policies to encourage them to request a review if their health has improved, to ensure they are getting the best value from their health insurance.

Members who are eligible for an exclusion or loading review will be contacted by nib. We will offer them the opportunity to provide updated test results and disclose any new information relevant to their assessment.

Our underwriting team will seek confirmation of whether relevant symptoms still exist and whether the member has been treatment free for the period required. As part of the review, we will also be referring any members that could benefit from our nib Wellness Programs.

If you have any questions please don’t hesitate to contact our Adviser Partner Manager team.

Any other insurers that are taking this approach, I would love to hear from you. 

The industry, versus companies in the industry

The New Zealand Herald coverage of RBNZ research and recent media releases reminds me of one of my favourite jokes about economists:

Three economists are taking a day off at the archery range. Being largely desk-based folks they aren't very good, but they're having fun. One draws their longbow shakily, aims, shoots, and misses the target by a metre to the left. The next draws their bow with effort, aims to the right, shoots, and misses the target by a metre to the right...
...the third economist then shouts "bulls-eye". 

So when a report worries about both high levels of profitability (applicable to some companies) and lower solvency margin (applicable to different companies) and the media reports about both talking about 'the industry' it is this use of an 'average' that is confusing for readers. How can the sector make too much money and run down solvency capital? It doesn't. Some companies have low margin businesses and tend to have falling margins of capital above minimums and others have big margins and have stable or rising levels of capital. The story is different for each company.  

The question of insurer efficiency, and in aggregate insurance industry efficiency, is an important one. It is complicated too. Unpacking it is hard and unlikely to be done in consumer-focused articles. Take just one issue: underwriting information. Major gains in insurer efficiency could be made is access to medical information, much like banking information, could be made more available at the discretion of each customer. If permission were granted to access ministry of health databases the results could make underwriting so much easier, and therefore quicker, and cheaper. It could be convenient, fast, and accurate. Usually we only get one, or sometimes two, of those three. But when the question of enhanced access to medical information is raised, even if that were controlled by the customer, the reaction from media is usually negative. So we are stuck with memory-test questionnaires that place disclosure burdens most heavily on the customer. 

Partners Life: Underwriting Management System

Partners Life's new underwriting platform was launched earlier this week. Originally announced as being called PLUME the name has been finalised as MUM (My Underwriting Manager). Today I attended a presentation on the new system and here are some of the key points:

  • It has reduced questions by about 50% from the original paper app form
  • MUM adjusts the questions based on the benefits quoted, so there are no income and work-related questions for someone applying only for Life Cover for example.
  • You can also apply for business covers through MUM, at this stage Business Life, Trauma and TPD can be automatically underwritten but some other business products such as Key Person cover and Loss of Revenue will still be referred to an Underwriter
  • After an online app has been done you can go back to the quote and change sum insured etc if the client changes their mind and MUM will automatically adjust itself accordingly
  • The confirmation of terms of a policy will be instantaneous in most cases
  • Payment methods can be added to avoid delay in issuing the policy and are verified in real-time
  • You have 90 days to complete an app, you can start and go back and continue it at anytime within the 90 days
  • MUM can be used to apply for alterations to existing policies but will it still need to be approved by an Underwriter
  • Customers can sign online to allow the insurer to gain access to medical records through Konnect
  • A customer signature is only required if requesting information from a Doctor, otherwise Partners Life just require the client to tick a box as a declaration

Utilising Konnect.NET’s free adviser tools

Konnect NET encourage the use of Track and Trace and Doctor Look-Up, free adviser tools on Konnect NET’s website work to support the experience that advisers provide to clients. 

Track and Trace is designed to allow advisers to keep track of clients' SureMed request status. While Doctor Look-Up is designed to provide a better understanding of a GP’s requirements. This could include specific consent requirements and determining if a client needs to book an appointment for an insurance request.

By identifying GP requirements and having some SureMed pipeline transparency means advisers can reduce delays and manage customers' expectations better. 

Currently, there are six major insurers on board: AIA, AMP, Asteron Life, Fidelity Life, OnePath and Partners Life.


Annotation 2019

The value of the price signal, versus the challenge of affordability

Arguably the most interesting question and answer at the FSC's breakfast event 'Risking Everything' was the last one. A member of the audience (who works at a bank, incidentally) highlighted the problem of affordability. Tim Grafton from the insurance council highlighted the value of the price signal. Both raised important issues. It felt like questioner and responder talked past each other a bit, yet progress in our insurance market relies on some degree of acceptance and change on both sides of this divide. A price signal isn't a price signal unless it changes behaviour. That means, by definition, some people have to find insurance cover un-affordable in order to change their behaviour: like not buying our building property in areas increasingly likely to be flooded, and choosing a smaller, better built property in an earthquake zone. But there are parts of the picture missing in this. Insurers must accept the need to be more efficient. Government can help too - zoning and planning permission has to do some work too, not just leave it all to the insurance industry to bring the bad news. 

We have a similar, but largely uncovered example in the life and health insurance sector. Rates must reflect risks otherwise there is no price signal. The essence of programmes like AIA's vitality is that changes in diet and exercise create changes in health that pay dividends to both insurer and client - and result in lower premiums. That fact means acceptance that some people who are more likely to claim, and therefore more expensive to insure, must get charged more. If this seems obvious to my insurance readership, it is worth pausing to wonder: why isn't it obvious to some clients, politicians, and media? Perhaps we need to take a leaf out of Tim Grafton's book and talk about the price signal, and then extend the argument to acknowledge our need to become more efficient, and describe the future. Where we are going, I hope, is a world where more people take better care of themselves and health services and insurers helps them to do so. There is plenty of room for improvement.