The unintended consequences of post-sales underwriting – February Forum Recap – Part 1
In our February Protection Forum session, a panel of experienced advisers and industry specialists examined one of the most pressing emerging issues in the protection market around post-sale underwriting and the unintended consequences of causing consumer harm. Joining the discussion were:
- Scott Taylor-Barr, Protection Adviser – Barnsdale Financial Management
- Katherine Stagg, Protection Adviser – Stagg Mortgages
The panel explored the growing practice of reinsurers requiring insurers to re-underwrite cases after a policy has already gone on risk, the consumer harm that can result, particularly in replacement business scenarios, and the urgent need for the industry and regulator to establish clear guardrails.
The first half of the discussion focused on the mechanics of post-sale underwriting and why it creates such acute risk for consumers. With estimates suggesting as many as one in five cases could soon be subject to post-sale checks, panellists highlighted a particularly dangerous scenario: a client is advised to cancel their existing cover after a new policy goes on risk, only for the new policy to be voided months later, leaving them with no cover at all. Compounding this are widespread concerns about the accuracy of GP medical records, which can contain errors that clients are powerless to correct, and which may trigger a post-sale review with devastating results.
Listen to the full session recording and explore the highlights below to hear how advisers and industry leaders are calling for a more responsive, transparent and human approach to underwriting.
“The real problem from a consumer point of view that sits behind all this is the time scale that those post-sale underwriting checks can take.”
“You’re on risk with your new insurer, cancel your old plan… Then 3 months later… ‘We’re cancelling the policy from inception. You’ll get a refund of premiums.”
“Post sale underwriting is here to stay. You’re not getting rid of it. But I think there’s a serious conversation that needs to happen about how and when it’s used and should there be a guardrail there and how long a reinsurer has to do it.”
“If it was done within 30 or 60 days… you would stand a chance of getting the previous policy reinstated.”
“We’re starting to see a fragmentation of people’s medical records… more and more insurers are now offering value added benefits… 24-7 private GP appointments… that’s not necessarily being recorded back in their NHS notes.”
“The NHS notes that used to be a complete record of somebody’s health… is becoming a more fragmented and less accurate picture.”
Click the audio playback below to listen to the full session.
Full session audio
Part 1:
Part 2:
“I had a case in not so long ago and it all passed absolutely fine. And then they did some sampling and then the client unfortunately could not get cover… they’d actually cancelled their existing cover before. So it’s just such a grey area because the problem is they can’t have the old cover and they can’t have the new cover and then you’re stuck in no man’s land.”
“Luckily, we did get it with another provider and it’s absolutely fine… But if we wouldn’t have done that… it came to this conclusion that they sort of picked it up and decided that they were just going to not do it.”
“We tried to get a life and critical illness policy and something was on her medical report. So we’ve got the medical report and it’s a completely different patient. It’s not even her!”
“It’s all to do with the consumer and clients and that’s what we’re all here for. So we need to get it right first time…”
