We have been contacted by several of our Intermediary members over the last few days to ask what actions Insurers are or might be taking in response to the Coronavirus pandemic.
As we see it there are currently three key objectives for our industry:
- To act in the best interests of our customers
- Protect the reputation of our industry
- Not see the Coronavirus pandemic as an opportunity for any one of us to gain a competitive advantage
Client retention is a key component of us continuing to run commercially viable and profitable businesses as well as being an FCA requirement.
Tuesday’s announcement of a new temporary Nightingale Hospital in London with up to 4000 beds, increases the additional bed capacity to over 12,000, together with more than 20,000 healthcare staff following last week’s historic announcement that many private hospital groups are to be available as an NHS facility.
Together, they will provide much needed support if the Coronavirus spreads as anticipated over the coming weeks and may be used to enable the NHS to continue carrying out other urgent operations and cancer treatments.
These positive announcements for the NHS have led to a number of you reporting clients saying “If I am not able to have treatment in a private hospital because those facilities have been commandeered by the NHS why should I keep my PMI cover?”
Unemployment, reduced incomes and financial pressures are also an unintended consequence of the emerging battle against Covid-19.
We have a key role to play in supporting clients, acting in their best interests, whilst reinforcing the additional value provided by their private medical insurance and health cash plans.
Digital GP services, employee assistance programmes and online and telephone based mental health support are invaluable benefits available to our members. We need to make sure they are aware of them.
Our Insurer partners are working flat out to provide support to clients with the introduction of new benefits, additional features to cover and payment options.
We held an AMII Executive Committee teleconference on Tuesday with representatives from across the Intermediary sector and the four main Insurers to discuss the steps our Insurer partners are considering to support clients. You should expect updates and announcements from them directly over the coming days.
We want to give you an update on the things under consideration.
Under FCA Competition Law Rules Insurers are not able to collaborate and agree standard amendments to Benefits and Terms.
Client Retention
All Insurers are currently working on a series of initiatives to support client retention. Most are currently considering the actuarial impact and financial modelling of each of these initiatives.
Initiatives may vary depending upon the class of business i.e. Consumer, SME, Small and Large Corporate as well as the general criteria applied to premiums – Age /Community rated/capped or differential pricing/experience rated.
Current cost initiatives under consideration include payment holidays, suspension of premiums, cash back or credit notes and 1-2-month free cover options. It does not follow all insurers are considering all options.
Clearly there are commission implications for Intermediaries in the event all or some of those things under consideration are deployed.
Cover downgrades and any future underwriting are also being considered.
Transfer of Underwriting
Almost everyone, other than those who fall within the Government’s business critical list, are now working from home. This creates its own problems at the busiest trading period of the year. Many Intermediaries, especially those smaller intermediaries, have temporarily closed their offices. Staff are either social distancing or are in self isolation.
As a result, obtaining and transferring members Registration Certificates to complete underwriting is proving to be a problem.
We have written to each of the Insurers today asking them to engage in the electronic transfer of member’s underwriting in order to complete the transfer to any new Insurer.
As part of the process we am asking Insurers to e-mail the appointed intermediary with confirmation the transfer of underwriting is completed. Where the required level of detail of proof is outstanding the onus is on Intermediaries to chase it.
This has significant process implications for Insurers when they are already massively stretched, which for most will require manual intervention to achieve.
We will report back to you once these discussions are concluded.
New business quotations
We are all aware of the poor conversion rates experienced by all Insurers as part of us conducting annual market reviews. We are not suggesting we should not continue to support our clients effectively, but we can reduce the burden on Insurers by only requesting quotations where business is likely to move providers or where there is client pressure.
If we continue to request quotations merely for market comparison purposes Insurers are likely to withdraw from quoting.
There has never been a time in living memory where our industry has faced the range of challenges we are now. The time for us to act as one for the common good is now.
