This is a reasonable question when you compare the number of underwriting questions on application forms today to that of a few years ago.
Most clients have always been able to make a full and accurate disclosure of the relevant information. However, the previous practice of asking a few questions about a client's whole medical history did receive some criticism as it was felt that some clients may be confused about what information insurers were really looking for. There was a perception that failure to mention trivial childhood illnesses could lead to claims being turned down. In practice only claims involving material non disclosure are turned down - these generally involve recent, or significant, conditions which would be memorable to most people.
In responses to these concerns, the industry has moved towards more focused questions about specific medical conditions that have been found to be relevant in the past. Obviously application forms cannot detail every relevant medical condition and we still have general questions which ask about conditions not specifically named. These questions are limited to a more reasonable time frame rather than requiring the client to record every single GP attendance.
The ABI has published some very useful guidelines on application form design but have shied away from a prescriptive industry standard application form. This makes sense because the level of detail requested in application forms does feed back into product pricing which is very much a matter for individual companies. It also allows providers to preserve individual office documentation standards and corporate identities.
In addition, the increasing cost of medical reports has led to a rethink in how we obtain information. In the past, life and disability application forms contained a few 'Yes/No' questions about an applicant's whole life medical history. If any of the answers were 'Yes', applicants were asked to complete a box with details such as condition name, dates, treatments, and investigations. In reality, when completed, this small box contained little more than the name of a medical condition. The insurer would then simply get a report from the client's GP.
The pressure to keep payment rates as low as possible and the ever increasing cost of medical reports have made this an expensive and unsustainable way to write business. GPs are also under more pressure than before to meet patient care targets and are not able to spend the same amount of time completing insurance reports. It is also fair to say that many of today's clients are well informed about their medical history and are more able to give insurers relevant details. Previously there was very much an attitude of ‘speak to my GP – they know best.’
Making more use of information provided by the client enables us to make faster decisions and only obtain medical reports where absolutely necessary. To do this properly the insurer must ask relevant questions. This is why more detailed questionnaires are now included in application forms rather than free text boxes.
The increased number of underwriting questions should provide benefits to product providers, advisers and clients because in the longer term they will help to avoid or reduce the numbers of disputed claims and help maintain lower payments, by reducing acquisition cost and process times.
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