Income protection specialists Unum claims its "revolutionary" underwriting system could soon mean only one in ten IP applications will require a GPs report.
The life and financial insurance firm asks IP applicants not to list and detail former illnesses or injuries – standard practice among most providers - but instead to explain how they dealt with them.
It says the new “behavioural” method means applications could take as little as two days, potentially saving IFAs more than a week’s waiting time, and in many cases eliminating the need for a GPs report altogether.
Linton Penman, head of retail marketing at Unum, says the system, based on what is called a Bio Psycho-Social Model and rolled out in June, is already having an impact.
“Traditionally, 40% of [IP] applications used to require a GP’s report,” he says. “The aim is to get that down to less than 10% and we’re on target to achieve that.
“It [the new system] is making a real difference.”
Penman points out an adviser’s well-publicised dislike for income protection was behind its decision to adopt its new underwriting methods, which were developed by a team of behavioural scientists at the University of Cardiff.
He tells IFAonline: “One wonders why advisers don’t sell more income protection.
“The underwriting process can be a very long-winded process and almost always means you have to write to your GP to get a medical report.
“But we take a different approach to verifying a client’s medical records, which looks at how people deal with incapacity rather than which illnesses or injuries they have had. It is called the Bio Psycho-Social Model.”
He adds: “We’re not interested in what went wrong with you, but in how you dealt with it.
“This means we don’t have to write off to GPs because we can get the information we need from the applicant and complete the policy in just a couple of days.”
However, Penman admits: “There will be occasions when we’ll have to get a GP’s report.”
He also scoffs at suggestions the new method is just as open to manipulation as the regular system, claiming it would be easy to check whether or not the applicant was lying and suggesting that “anyway, most people tell the truth”.
Up until three years ago, Unum focused almost all its resources on IP plans for company employees, claiming that most workers were covered by Unum without knowing it.
However, it has recently expanded into the IFA market, arranging policies for individuals through their advisers. It says it currently has around 50,000 individual policyholders, out of more than two million in total.
In June, at around the same time it rolled out its Bio Psycho-Social Model, Unum also lowered its premiums leaving it the lowest-priced IP provider in the market, according to Defaqto.
“We feel we understand IP better than anyone else and we’re using that to improve our proposition and we can do it with enormous confidence,” Penman says.
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