People tell me that most of the time I seem to represent a reasoned and proportionate voice for change in the UK life and health protection market. I always let out a sigh of relief when I hear this because underneath this facade I’m as mad as a bag of spanners! A lifetime of biting my tongue and learning which battles are worth fighting has served me well and tended to obscure my most eccentric excesses.
Sometimes, however, I let myself down by coming out with utter stupidity. I fear this is going to be one of those occasions. However, I am partially comforted by the advice I was given at the first brainstorming I ever went to which said that no idea is a bad idea. The person who told me this no doubt considers that no serial killers or arsonists are bad people either but at the time I was much encouraged.
My train of thought started a few weeks ago when I was renewing both my building and contents insurance and my motor insurance. Once into confused.com, it is a geek’s dream, with all sorts of variables you can programme in – bigger excesses, other drivers, low mileages and so on. In a sad sort of way what could have been tedium was fun – at least to me anyway. At my time of life that’s about as exciting as it gets.
My mind turned to income protection (IP) – as it often does – and I compared the process for taking out IP. Even short-term IP (if it hasn’t been blown away by the Competition Commission) is far harder to write than motor and contents (and payment protection insurance!).
What, I mused, if we were to push the envelope? After all, we use regional morbidity in group IP underwriting – why not use postcode-related morbidity stats in consumer IP? Don’t leave out all underwriting questions, but what if we were to use mechanisms like postcode, a black box of underwriting adjustments, a reduced percentage of income and a short benefit paying period to come out with an algorithm that the public could use – certainly for short-term products for people under 40.
Teleunderwriting has improved the underwriting process in IP so why not push on further (even using it as a back-up for short-term). Then, if results looked sensible and we felt the world wasn’t going to be selecting against us, maybe we could look at extending this methodology? As they say in all the best films: “It’s crazy…..but it might just work!”