Gemma Harle is managing director of TenetLime
Brokers are unwittingly becoming involved in something of a protection racket.
Providers are getting concerned over the growing problem of non-disclosure, with Munich RE claiming that as many as seven per cent of life and critical illness applicants non-disclose.
They assert that these are not individuals forgetting a high blood pressure result from 10 years ago, or mis-communicating complicated medical information. Instead, their analysis shows that it is deliberate non-disclosure of conditions such as long-term alcohol abuse, depression and even cancer.
Ironically, some applicants would have got better terms had this information been available, as it clarified that a particular condition was in fact controlled or irrelevant.
Insurers are questioning if it is feasible to address the problem at point of sale. And that’s where the intermediary sector has a part to play.
For although they are not yet coming after brokers when a claim is disputed, they surely will do if the rate of false disclosure continues to rise.
If it does, there will be a corresponding reduction in the number of claims paid, accompanied by an increase in the price of policies.
Probing into someone’s personal life – especially if the client is a friend or relation – is understandably difficult and potentially embarrassing. It is without doubt a very sensitive issue, requiring a well-developed set of ‘people skills’. But it is a job that has to be done.
Unfortunately you cannot rely solely on application forms to eliminate non-disclosure. Obtaining full medical records is being considered by insurers, but there is no indication as to whether, or when, this will become standard procedure.
However, if you are uncomfortable delving into such personal detail, there are several specialist agencies who will handle that task for you. They will also take responsibility for any false disclosures and will help drive up the overall quality of the business you place.