Nigel Bradshaw – Will Big Data Simplify or Complicate Protection Applications? – MPAF69

A recent recurring topic on the MPAF Podcast is the complicated protection underwriting process.

In this episode I talk to Nigel Bradshaw and we debate whether Big Data could make underwriting protection applications simpler.

Or whether it might make it more complicated.

That’s all right here in Episode 69 of the Marketing Protection and Finance Podcast.

Will Big Data Simplify or Complicate Protection Applications

Who is Nigel Bradshaw?

An Actuary, Nigel describes himself as a potent initiator and deliverer or change. He’s worked at Prolific Life and Pensions Ltd and Scottish Provident.

Nigel now works through Redmayne Consulting on actuarial matters, through Mortality Metrics on the delivery of big-data solutions and through Make Sense Partners when developing and running new propositions.

Nigel also helps the family business Distant Shores Au Pairs, which offer 3-12 month placements in China.

Nigel’s Links:

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Andrew Wibberley on Risk, Post Codes and Sleepwalking into Preferred Lives Underwriting – MPAF66

Are cheap protection prices in the UK an illusion?

Each provider fights to appear competitive on comparison sites, but one in four or more applicants now face extra premiums after underwriting.

Is that fair?

In the episode I talk to Andrew Wibberley, an underwriting expert with a provider a reinsurance pedigree.

We discuss whether we have sleepwalked into preferred lives underwriting and how far we can take this before it becomes unreasonable. We debate using post codes and whether that will shave more off the headline rate but leave even more people open to paying higher premiums than they were expecting.

That’s all right here in Episode 66 of the Marketing Protection and Finance Podcast.

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Who is Andrew Wibberley?

A law graduate, Andrew has worked as an underwriter for Fortis (Now AIG) and head of underwriting for Swiss Re.

He recently left corporate life to set up Alea Risk, a consultancy aiming to make the purchase of life insurance easier.

Andrew is married to Charlotte Wibberley who appeared on the MPAF Podcast back in Episode 57 talking about virtual assistance and online business management.

Andrew’s links:

If you enjoyed this episode – Andrew Wibberley on Risk, Post Codes and Sleepwalking into Preferred Lives Underwriting – please leave a comment or a review on iTunes. And if you know anyone who would enjoy the show – please share it with them. You can use the buttons below to share on social media.

Don’t miss an episode of the MPAF Podcast – subscribe now.

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Be Brave and End the Protection Madness

Is the individual protection market a little nuts?

Well, they say the definition of madness is to continue to do the same things and expect different results.

Protection Madness

The levers we repeatedly pull are to cut the prices advisers see on portals, add to the complexity of products by including more features and, more recently, publishing claims statistics to prove to ourselves we actually pay.

Arguably none of these tactics grows business. Lower prices do not stimulate demand as they do in regular markets. More features increase the need for advice but do not resonate with consumers. Claims statistics in the high 90 per cents look good on the pages of trade magazines but out in the real world people think we only pay half that.

However, the conversations going on in marketing meetings at protection providers all involve price, features and claims statistics. More of the same will not yield different results and we are back to the definition of madness.

And what about the unintended consequences of pulling these levers? The headline rate might be cheap but more people face health loadings after going through the endless underwriting process. Compliance requires a thorough evaluation of product features and creates masses of work for advisers.

As a result cottage industries spring up to solve the problems the levers create. New applications like UnderwriteMe try to get answers to the questions before the quote so clients get a more exact figure. Comparison portals become ever more complex to deal with menu products, longer illness lists and added value features. Super detailed product comparison systems like CIExpert become essential to satisfy the compliance process.
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This might seem an overly critical assessment of the market but having been part of the process myself for so long I know how difficult it is to break out of these constraints. If doing the same things does not grow the market then logically doing something different might.

I am sure that if we consulted consumers they would ask for simpler propositions, much shorter applications and a guaranteed payout if needed. But such a product would be more expensive because of the reduced underwriting. It would fail the price test. Fewer illnesses and added features might be easier to understand but would fail the advice and compliance test.

Even those companies that have tried products with reduced question sets in the direct to consumer or consolidator space have failed because they are attempting to push product on price comparison engines. A proposition that is up to 40 per cent more expensive is not going to cut it.

So how do we solve this conundrum? An annually costed premium might offset that 40 per cent premium price for a quick application product. No one has tried that yet so presumably lapse risk is a worry.

Perhaps someone needs to be brave enough to offer the two-question product for the same price as the fully underwritten one. While actuaries, scared by selection risk, might condemn such a suggestion as madness we have already agreed that continuing to do the same things as we always do is equally nuts.

A question for you: What would you do to end the Protection Madness if you could wave a Magic Wand? Please share on Twitter or Facebook or LinkedIn or Google+.

You can find the original version of this article in Money Marketing Magazine.