Consumers are five times more likely not to disclose important medical and lifestyle information on paper applications than with tele-underwritten applications.
AXA analysed data from more than 9,500 applications for protection products over the past year and found non-disclosure that could potentially lead to a claim being declined with 5.78% of paper applications. This compares with 3.48% for electronic applications and 1.23% for tele-underwriting applications.
The results show clear advantages for electronic applications generally, which is likely to be because further questions can be automatically generated to get more detail in areas where consumers declare relevant medical history. Tele-underwriting takes this a stage further again because trained tele-underwriters can drill down to get specific details of medical conditions, further reducing the risk of non-disclosure.
Mike Taylor, Chief Underwriter for AXA, says: “What this research shows us is that tele-underwriters’ knowledge combined with our expert underwriting system allows the relevant questions to be asked and hugely reduces the risk of non-disclosure. All these cases of non-disclosure were found at underwriting stage, so we were able to correct the applications and underwrite accordingly to make sure the consumer was properly covered. What’s worrying is that in cases where non-disclosure isn’t picked up by providers, consumers may find they’re not covered when they come to claim.Tele-underwriting also reduces the need for additional evidence because the Tele-underwriters collect in-depth medical information from the consumer, enabling 75% of policies to be issued within five days.Non-disclosure is a huge issue for the protection industry and anything we can do to reduce it can only be a benefit to consumers , who can then have faith that protection products will pay out. We believe that tele-underwriting can increase confidence within the industry, and this is reinforced by our own claims record, with no major benefits declined on tele-underwritten cover.”
AXA is now assessing how the benefits of the tele-underwriting system can be used to improve its standard electronic application to further reduce non-disclosure.