Does My Insurer Understand Me

Fri June 1st 2018

​I am fine, I am healthy. Aren't I? Health can be a complex issue in life's journey of bumps, bruises and illnesses. Your doctor is there to look out for your best medical interests and their advice is invaluable. So why is it that insurers and your trusty General Practitioner sometimes agree, disagree or agree to differ? Why do some people have exclusions and loadings placed on their cover when their GP assures them everything is fine?

I am fine, I am healthy. Aren't I? Health can be a complex issue in life's journey of bumps, bruises and illnesses. Your doctor is there to look out for your best medical interests and their advice is invaluable. So why is it that insurers and your trusty General Practitioner sometimes agree, disagree or agree to differ? Why do some people have exclusions and loadings placed on their cover when their GP assures them everything is fine?

To answer that question, we need to examine the differences between doctors and underwriters. Doctors have a singular focus – your health, wellbeing and treating you appropriately to resolve whatever is ailing you. They are dedicated, passionate and do amazing work focusing on each patient. Underwriters assess each individual while maintaining a larger focus on the client base to ensure fairness, consistency and undue risk.

The word risk is important here and is key to understanding the difference between the decisions a doctor and an underwriter will make. Let's look at a practical example:

"I went for a jog one morning, felt some chest pain and thought just to be safe I'll see my doctor and see if there's anything to worry about. After a few tests my doctor concluded it is probably just overexertion and nothing to be worried about. He advised me to take it easy, keep hydrated, and watch my diet. When I applied for insurance they asked me huge amounts of questions and wouldn't give me cover until I had been for more tests. If my doctor is happy, why isn't the insurance company?"

In this scenario the doctor is assessing the risk in front of him – what is the immediate danger the patient is in and do the symptoms indicate some underlying condition that requires treatment? Your doctor's focus is to uncover exactly what you are suffering from at the point of your consultation. They are adept at deciphering your symptoms and initiating treatment with the singular goal of getting you back to your healthy best.

Underwriters have a slightly different focus when it comes to assessing your health. When quantifying your risk, an underwriter is looking not only at what your present state is, but the risk for the lifelong duration of your policy. The chest pains you experience while jogging may mean you are predisposed to conditions that may only present themselves later in life. If the condition is serious and potentially debilitating, an underwriter needs to assess the likelihood of it occurring and adjust their assumptions accordingly.

Underwriters assess risk through multiple factors: sometimes based on the condition; sometimes based the cover applied for and sometimes a combination of both. The specific requirements an underwriter calls for, or the terms they apply, may seem strange or unwarranted. The reality is that they are assessing the life-long likelihood of something happening based on your present-day state of health. If half the people who have mild chest pains today go on to have major coronary conditions in the future, an underwriter needs to assess that risk correctly today.

Balancing the scales through specific terms and exclusions allows an insurance company to offer cover on the fairest, most sustainable basis. At its core, insurance is built to be a life-long contract and careful, insightful, nuanced underwriting ensures clients have the protection they need today and well into the future. This focus on insightful assessment of risk allows a company to revise its assumptions if conditions improve in the client's favour (stopping smoking, losing weight, lowering cholesterol etc.)

On a macro level, improvements within the medical industry can allow underwriters to more favourably assess clients over time. Conditions such as hepatitis and HIV were once classified as impossible to cover. Decades on, with the advances in modern medicine, such illnesses are not only manageable but are now more easily quantifiable from a risk standpoint.

General Practitioners are the backbone of our health system and assist greatly with the development of a healthier society. Whilst there may sometimes be disagreement between insurers and your doctor, it is important to remember that they do not function in the same role or work towards the same outcome.

An excerpt taken from Partners Life ''Partners Papers'', Issue 13 April 2018

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