I occasionally – against my will of course – am dragged into bars by protection IFAs. They rant and rave at me as a way of alleviating their tensions. I feel it is therapeutic for them to do this and if I have a nice Chardonnay to hand I can withstand the angst they exhibit because of their treatment at the hands of the providers.
The most pressing cause of concern I am picking up on a regular basis is on underwriting. You must forgive me for indulging myself in a walk down Memory Lane, but when I was a young underwriter (yawn) 95% of lives were accepted at ordinary rates (just in case there are any actuaries out there reading this, it means that 5% of cases were rated). You had to be pretty ill to be rated and some offices went out of their way to offer terms on “substandard” cases (not a very user-friendly term) even if in reality most of the reassurers took most of the cases.
My last glass of Chardonnay at the expense of a frustrated (and frankly sobbing) IFA was a few days ago. He blubbed rather embarrassingly into his beer (I exaggerate for effect) that he couldn’t remember when he last had a case taken at ordinary rates without some caveat or further evidence being required. IFAs are prone to exaggeration and would make good fishermen but he regaled me with frankly ridiculous stories of loadings on cases where the life assured was to all intents and purposes a healthy person. Ratings are more draconian now for blood pressure, diabetes, body mass index, high cholesterol and so on – but, excuse me, aren’t mortality rates improving exponentially?
It is of course all about portal quotes. Everyone wants to appear the cheapest and at least strive to be in the Top 6 (rather like Tottenham). Then, having hooked the IFA, underwriters find any excuse to fatten the rate by loading them. Excuse me for being controversial but this isn’t terribly in the spirit of Treating Customers Fairly. It is misleading, annoying, a turn-off for customers and intermediaries and leaves the industry yet again in danger of being criticised in the media. It would be better to quote basic rates which accommodate a bit of imperfection and which don’t leave clients feeling insulted, hurt or worried about their health. It is harder to get big or difficult cases written now than it was twenty years ago when almost everybody got competitive cover. Doesn’t sound like we have gone in the right direction in that time, does it?