Online quotes, portals, email encryption, social networking…insurer technology promises much but is it delivering for brokers? Edmund Tirbutt investigates.
The types of technological advances that could eventually impact on health insurance and protection are mind boggling. Scientists, for example, have for long predicted that we will have intelligent clothes able to detect if you are likely to have a heart attack and capable of phoning an ambulance when one occurs. They have also forecast the emergence of intelligent toilets, able to advise you on whether you are eating the right diet – although there have to be doubts about whether an entity could be considered truly “intelligent” if it is prepared to be a toilet!
While such advances, which were already being touted well over a decade ago, have yet to become a reality, digital pen services are already enabling nurses to input data while undertaking screenings, voice stress analysis techniques are being used to detect signs of stress over the phone and some life offices are looking at neural network technology to help claim assessors determine the likely length of a claim.
The internet is also ensuring that consumers have direct access to a great deal more information, but this can present something of a double- edged sword.
Dominic Howard, Europe director at expert second medical opinion provider Best Doctors, says: “Our own data shows that around half of those who have seen a doctor and received a diagnosis then go and do their own research online, and that around one sixth actually print off information and bring it to the attention of the doctor. There are, however, also many ‘cybercondriacs’, and research suggests that one in four patients who research common surgery on the internet are left worried and confused. So there’s a massive amount of information out there, and one of challenges for insurers is to present it in an easy-to-read manner and in a way that is relevant to individuals.”
Additionally, while technology is helping to make intermediaries more efficient, it is also helping direct selling organisations to access the public more effectively online. Indeed, some private medical insurance (PMI) intermediaries complain that enquirers they have quoted for frequently also go to moneysupermarket.com and find they can get a keener quote without realising that it may involve significantly inferior cover.
Security issues are also clearly still weighing heavily on many minds, and it does not take a genius to work out that there are probably a number of potentially embarrassing accidents waiting to happen. For this reason Simplyhealth, which has received flak from intermediaries for insisting on email encryption for the past 18 months, is none too repentant.
Jack Briggs, intermediary sales and marketing director at Simplyhealth, says: “Email encryption is not popular with everyone but it’s necessary. Sometimes intermediaries say we are the only ones doing it but we believe it’s best practice and won’t be apologetic, and we believe others may follow. We have CCTV in all our data rooms and all our data is backed up on a nightly basis and encrypted. Information security is one area in which health insurers do differ quite markedly and I think that it will become a bigger and bigger thing in the industry because the press always get onto any serious breach.”
The social network
Insurer and intermediary websites are increasingly including their own blogs and Twitter feeds, and some organisations are fast cottoning onto the potential evident in the trend towards smartphones. Cash plan provider Westfield Health in fact reports that the number of hits on its website from hand-held devices is doubling month on month, and it has already launched an iPhone app which can enable policyholders who select the appropriate software to access their cash plan details.
Paul Shires, executive director, sales and marketing, at Westfield Health, says: “It’s important not just to use technology for technology’s sake, so all developments must be relevant and useful. When Sheffield was hit hard by the snow this winter we used Twitter to manage expectations by announcing that we would only have a skeleton staff in the office, and access to the news section on our website has doubled in last six months as a result of us being on Twitter.
“Plugging into social media chat clearly presents an opportunity for the future but you must be careful how you do it. At least one well-known brand I am aware of has upset the public by being too overtly advertorial. We know that people don’t necessarily talk about insurance on the social media network but they do talk about health, so we have therefore set up a health Twitter account.”
Westfield Health has also set up a separate Twitter account for its Health365 product containing an “Ouch Map”, described by Shires as “a bit of fun that provides a way of engaging with the social media without being too pushy”. Providing a map of a skeleton, the Ouch Map invites those who have hurt themselves to rate their injury on a scale of one to 10. Because it also ascertains where they live, it can provide information that can be used for light-hearted marketing purposes by revealing, for example, that those in some areas are twice as likely to bump their heads as those in others.
Protection provider Bright Grey has designed a prototype of what its iPhone app would look like but feels that it is too early to be considering putting it into use just yet.
Roger Edwards, proposition director at Bright Grey, says: “Smartphones and the social media generally are a very interesting area but it’s one that is still in infancy in the UK and, although I’m constantly being approached by so-called social media experts offering me the chance to spend money with them, I’m very wary of anyone who presents themselves as an expert in this field.
“We have tried a few things out and, although some work OK, others don’t work. I feel that technology will make advisers’ lives a bit easier but that we will all carry on with roughly the same products and procedures for the time being. Possibly in a few years’ time, however, we could develop new products to feed off the new technology. It might, for example, even be possible to develop an iPhone that can produce a needle at the click of a button which can be used to take a blood sample.”
The individual protection community has far fewer issues with technology than its group risk or individual or group PMI counterparts. The Exchange and Assureweb provide decent pan-industry quotation portals, and providers have invested heavily in intelligent underwriting and intuitive processes. National specialist intermediary LifeSearch is therefore able to report that at least 90% of its business is conducted electronically and that the remainder which involves paperwork is largely policy documentation sent to clients.
Matt Morris, senior policy adviser at LifeSearch, says: “I am not aware of any intermediaries doing paper-based quotes any more, and most quotes can be done on the same day. Most providers also do online underwriting to some extent, although some do more of it than others and some excel in particular niches, no-one stands out across the board on it. The majority of the industry has progressed to the electronic age in a positive fashion and most people seem to have grasped the nettle, although the one area they are lagging behind in is electronic trusts.”
So far only Friends Provident and Ageas Protect are providing electronic trust facilities. At the claims stage AEGON is also unusual in enabling intermediaries to keep up-to-date on the progress of claims via a pipeline tracking system, and some insurers are putting more resource into integrating back office systems than others. But, on the whole, once one or two insurers have led the way on something it is only a matter of time before the others follow.
Most technological beefs expressed therefore tend to be from providers with non-standard products that are not search engine-friendly. Exeter Family Friendly, for example, laments that the process for obtaining a quote on The Exchange for its low-cost income protection (IP) product Bills & Things is so long-winded that it doesn’t happen very often. Exeter is, however, liaising with portals and is hoping to see them demonstrate more flexibility next year.
Similarly, Ageas Protect’s Real Life Cover used to cause a certain amount of confusion by sitting on both the IP and critical illness (CI) sections of The Exchange, and some advisers have mistaken its CI cover for full CI despite the fact that it only covers heart attack, cancer and stroke. But these issues have now been resolved.
Roy McLoughlin, senior partner at Central London based IFA Master Adviser, also bemoans the inability of search engines to do justice to multi-product propositions.
He says: “Only Direct Life & Pensions uses technology brilliantly and can properly present a multiple proposition. On The Exchange it’s well-nigh impossible and I can’t believe someone hasn’t copied the Direct Life model on an industry-wide basis. I have heard The Exchange and Assureweb nattering that they are looking at the issue but nothing seems to have happened. One reason sometimes given is lack of demand but this is completely untrue because Treating Customers Fairly requires holistic planning. So why not have an individual pan-industry search engine that includes PMI as well as protection. After all, Prudential already includes PMI in its protection menu.”
The group risk field, where the main technological stories are finally starting to appear outside the flex market, seems unlikely to develop a pan-industry search engine because the consensus view amongst intermediaries and insurers is that the products concerned are too complex to make this either necessary or feasible. Industry body Group Risk Development (GRiD) is, however, well on the way to developing the next best thing. It is not aiming to facilitate online price comparisons but to short-cut the process for intermediaries of shopping around insurers.
Legal & General’s Steve Ellis, who chairs GRiD’s Raising Standards Working Party, says: “An intermediary will fill in a single template and it will go to all insurers they select. Insurers will probably get back to them directly but we may give them the option of replying via a portal. Insurers have agreed on the principle and are seeking funding and looking for software suppliers. We are hoping to have something up and running by the end of this year.”
This new facility should particularly help smaller intermediaries but many large and medium-sized ones are also now creating their own platforms for employers to use, and some plan to start taking over the administration from the insurer by having better interfacing with the client’s payroll system.
Individual providers such as Canada Life, Unum and Bupa (the protection and group risk business of which has been acquired by Friends Life) have come up with electronic quotation systems for their own products and the first two even enable business to be put on risk online. Furthermore, Ellipse, which doesn’t yet provide IP, goes significantly further by allowing medical underwriting to be done online. All declarations and agreements that an individual needs to agree to are signed
upfront, including access to medical reports – although the company tries to avoid getting medical attendance reports whenever possible.
Peter Fenner, spokesperson for Ellipse, says: “Everything we do is designed with the internet and online usage in mind. We don’t issue any paper documentation and we upload data into a secure website. We are blazing a trail but I feel the underwriting is an area which will be quite tricky for others to follow. Being part of Munich Re Group meant we had access to Allfinanz and the software it has developed. “
Julia Turney, head of benefits management at national employee benefit consultants Jelf Employee Benefits, says: “Group risk is ahead of PMI on technology. Canada Life’s CLASS system has administration platforms and allows cases to be written online but I still feel there could be better use of technology using online forms. Ellipse is the only one doing online underwriting, and this would seem to be the way forward as its system is very simple and easy to use. Canada Life allows you to track the progress of a claim online but I feel it should actually be possible to send in an IP claim online instead of filling in a lengthy form.”
Paul Avis, sales and marketing director at Canada Life, feels that the next major group risk challenge is one of linkage and that flex platforms, payroll platforms and advisers’ own platforms all need to be linked with group risk providers. He emphasises that the National Employment Savings Trust (NEST) will also bring opportunities to integrate platforms with pension providers who don’t do group risk but want to form strategic partnerships with providers who do, and he also stresses that group risk providers must become much better at communication.
Private medical insurance
PMI spokespeople commonly bemoan the lack of a pan-industry quotation system although some feel this is only a realistic possibility on the individual side and not on the group side.
Graeme Godfrey, director of Best Go Private, a specialist intermediary based in Stanmore in Middlesex, says: “We need technology to give clients the best deal. So if we had a really good quotation system it would open up the market. The group side is very different because of provider sensitivity over claims data and loss ratios but there is no reason why the individual side shouldn’t do it. We are still behind individual protection and individual financial services generally on technology.”
Past attempts to satisfy such pan-industry requirements on the individual sides via MediQuote and on the group side via Healthcode are understood to have failed primarily as a result of not being able to secure the participation of all the major players. Fear of losing control is the most commonly attributed motive for their lack of cooperation but Alistair Sclare, healthcare director at Groupama Healthcare, doesn’t see why this should be an issue.
He says: “I don’t see why any of the major players should fear a system like this on either the individual or group side. In the general insurance field all the major players are prepared to participate in a pan-industry quotation system and it doesn’t leave any of them at a disadvantage.”
On the individual PMI side the technology is clearly available to produce such a pan-industry system because Chase Templeton Group already virtually provides one to all its distribution channels via Prognosis, which can quote for 13 UK providers and seven international ones. It can also shorten the process of applying for SME quotes, without actually providing a quotation system. Prognosis is currently used by 55 PMI intermediaries who are members of Chase Templeton’s Network Protect broker network.
Insurance Resource currently provides the nearest thing to a pan-industry quotation system. Giving real-time access to 11 UK PMI providers, it offers a bespoke service to enable intermediaries to approach insurers quickly and cost-effectively. Six SME providers can also be accessed real-time and five others by email. Subscription to the service for quotes and benefit comparisons for both individual and SME business costs £165 plus VAT a year, and there are currently 150 intermediary users.
Some intermediaries have also developed their own in-house pan-industry quotation systems for individual PMI. National specialist intermediary The Private Health Partnership, for example, has designed one that enables its staff to click a button to obtain rates, investigate whether products meet demands and needs and to use the data for their market review. National specialist intermediary Best Health Insurance UK has also developed a system that gives a rough initial indication of price.
But not everyone thinks that pan-industry quotation systems are the be-all and end-all. Indeed, Glen Smith, managing director of HealthCare Partners, a specialist intermediary based in Braintree in Essex, feels technology is a less important issue than both the need for product innovation and the need to obtain tax relief to make premiums more affordable. Adrian Humphreys, managing director of corporate clients at WPA, even feels that pan-industry quotation systems are a discussion of the past on the grounds that “some of us have moved on.”
The vast majority of WPA’s individual and group PMI business is untouched by human hand and the company has so little paper in its offices that it doesn’t even use in-trays. Furthermore, its technological revolution has quadrupled its security levels and it is most unusual in having acquired Information Security Standard ISO 27001.
Humphreys says: “We turn around a quote on the corporate side in around two hours, so why have a pan-industry system that doesn’t tailor the quote so well? I would far prefer to do 400 really good tailored quotes a year than 4,000 scatter-gun quotes which try and disguise activity as service.”
Groupama is another to run an unusually high-tech PMI capability, which results primarily from its general insurance operations – where it does full cycle electronic data interchange (EDI) on a number of classes of business. It is able to get IT solutions bespoked via a stand-alone PMI platform and is exceptionally agile. Its EasyAdmin system offers brokers the chance to carry out mid-term adjustments online and to get P11D statements and claims information.
Even if the major PMI providers suddenly started showing a marked appetite for cooperating with an initiative to produce a pan-industry search engine, lack of intermediary demand and the complexities of comparing products could prove insurmountable barriers.
Kevin Amphlett, CEO of Chase Templeton Group, says: “Most of our broker members get use of Prognosis for free, and we’ve found intermediaries are not prepared to pay that much for it, so there’s not a lot of money to be made from offering such a system. We’ve also realised that there is no point in actually doing a pan-industry quotation system on the SME side as there is so much bartering on price at renewal, unlike with individual business. “
The potential user universe for a pan-industry search engine is also much more limited than with individual protection. Insurance Resource estimates that there are probably only around 400 intermediaries likely to benefit from its PMI service. The financial incentive for any independent organisation to go the whole hog and provide a pan-industry search engine would therefore seem limited.