Open Letter To GPs

The Forum Of Claims and Underwriters hold regular events for their members; composing of claims assessors and underwriters from direct life offices and reassurance offices.

At a recent event with Dr Margaret McCartney we discussed, in part, the relationship between GPs and the insurance industry. Dr McCartney was kind enough to poll GPs for their opinion. Although the poll was completed by only 19 GPs it did highlight a number misconceptions with regards to our industry.

Survey completed by GPs who follow Dr McCartney on Twitter (19 responses)

We would like to address a few of these.


Our membership represents those companies trading in long term insurance products; primarily life assurance, critical illness and income protection policies. They are distinct and separate from general insurance products (property, car, travel etc) which have their own legislation, standards and authorisation.

Life Assurance – Payment is made when the insured person dies. Most companies will also include terminal illness cover that will pay out if the insured is expected to die within 12 months.

Critical Illness – A lump sum payment is made when the insured person meets the definition of one of the critical illnesses named in their policy. Most companies offer nearly 40 insured conditions, which include conditions such as cancer, heart attack and stroke.

Income Protection – Benefits are paid regularly, usually weekly or monthly, when the insured person becomes incapacitated, and hence unable to work due to sickness or injury.

Why do we request medical information from GPs?

Underwriting – This is the process by which an insurer decides whether to accept an application for insurance.

The majority of applications are accepted without any change to the basic premium and require no additional information other than that contained on the application form. However, for certain medical conditions or for high amounts of cover an insurer will seek further medical information from a customer’s GP. This may be for a specific condition or their full medical history.

The information provided by GPs helps considerably in a number of areas:

  • It allows the insurer to more accurately and fairly assess the risk presented to it. This includes providing insurance cover to people who have a serious medical condition; although a higher premium may be charged.
  • On occasion a GP will identify a condition that should have been disclosed by a client on their application form. Non disclosure could compromise a client’s cover. It’s in the customer’s best interest to identify and address any disclosure issues at the underwriting stage rather than at the claims stage.

To protect all its customers it’s important that an insurer charges a premium that reflects, as accurately as possible, the risk that is presented. If the company undercharges this could compromise the ‘pool’ of money from which claims are paid, resulting in higher premiums for all its customers.

Claims – Your reports help the claims assessor strike a fair balance between ensuring that the client making a claim receives their full and just entitlement (paying out valid claims) and protecting the insurer from paying claims that can not be substantiated.

The claims assessor is seeking enough evidence from GPs to subtantiate a customer’s claim. To prevent an otherwise valid claim from being paid due to lack of information, it’s important that a GP provides speedy, full and accurate information to the insurance company.

Just how many claims do we pay?

The total value of claims paid out to customers for life assurance and critical illness has continued to rise significantly. In 2010 a total of £1.9 billion was paid out to 40,000 families and individuals during some of the most difficult times of their lives. The average pay out in 2010 was £47,166, almost double the average salary.

Figures from the Association Of British Insurers (ABI) show considerable improvements in the percentage of claims paid. This followed a number of initiatives undertaken by the insurance industry that aimed to raise standards in the way insurers carried out their business.

Specifically, the industry has helped its customers understand the features and benefits of the products; it has highlighted the importance of full disclosure and sought to decline only those claims where deliberate non disclosure is proven.

The table below shows that the vast amount of all claims for life insurance are accepted. Where they are not this is usually due to non-disclosure by the client when they applied for insurance cover. The percentage accepted has improved every year.

With Critical Illness claims a larger number are not accepted at claims stage but this is mainly because the customer has not had the critical illness shown on their policy.

Critical illness claims

Year Total number of CI claims paid CI claims paid as a percentage Total number of CI claims declined CI claims declined as a percentage
2010 11,161 89.9% 1,248 10.1%
2009 11,816 90.3% 1,265 9.7%
2008 12,750 90% 1,417 10%
2007 10,000 84% 1,900 16%

Term life claims

Year Total number of Term Life claims paid Term Life claims paid as a percentage Total number of Term Life claims declined Term Life claims declined as a percentage
2010 29,182 98.2% 534 1.8%
2009 28,549 98.0% 585 2.0%
2008 24,196 97.2% 704 2.8%
2007 33,200 97.0% 900 3.0%

What’s next?

The insurance industry has worked very closely with GPs for many years and is extremely grateful for the work you have done, helping us ensure our customers have the security of knowing they are financially covered should the worst happen. When the worst has happened, we simply could not have paid out £1.9 billion in 2010 without your help.

We appreciate a GP’s main concern is for the primary care of their patients. We also appreciate just how busy a GP’s day is and why completion of an insurance report doesn’t always get top priority. It’s therefore very important that we work together to make any interaction as painless as possible. We wish to encourage a  positive working relationship to help us continue to offer products for the “social good” of your patients. 

It’s rare for both parties to get the chance to interact so we really appreciated the opportunity to hear from Dr McCartney and  her colleagues’ opinions at the FOCUS event. We would like to continue this dialogue with GPs.

SURVEYDr Rob Rosa is a GP in Salisbury and chief medical officer for the Swiss Re in London. He maintains that helping patients acquire and benefit from insurance products is a social good and an essential part of the GP’s workload. Dr Rosa plans to issue a questionnaire at a national level to truly gauge the grass root opinions of GPs regarding evidence gathering and data disclosure when dealing with insurance companies. So watch out for news on Dr Rosa’s questionnaire in the medical press.

Thank you and please leave a comment below if you would like to share an opinion.

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